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What is the correct credit portion of the journal entry

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Question - A bondholder decides to convert 40, $1,000 convertible bonds with a carrying value of $40,000, into 2,000 shares of $5 par value common stock. What is the correct credit portion of the journal entry for this conversion?

a. Credit: bonds payable 10,000

b. Credit: bond payable 40,000

c. Credit: common stock 10,000, additional paid-in capital 30,000

d. Credit: common stock 20,000; additional paid-in capital 20,000

Reference no: EM132739192

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