accounting

Cash $1,200,000 Discount on Bonds Payable (DR) $40,000 Bonds Payable (DR) $2,040,000 Common Stock (CR) $200,000 Paid-in Capital in Excess of Par Value (CR) $160,000 Cash (DR) is debited for the $1,200,000 bonds that are being converted. Discount on Bonds Payable (DR) is for the unamortized $40,000 discount remaining on the bonds before conversion. Bonds Payable (DR) is credited as $1,200,000 of the bonds are converted at the rate of 20 shares of $10 par value common stock. Common Stock (CR) is credited for the 200,000 shares to be issued on conversion. Paid-in Capital in Excess of Par Value (CR) is credited for the difference between the $2,040,000 of bonds payable and the $200,000 of common stock issued.