$$Arco$,$ Inc. issued $ $540$ comma $000$ of$4\%,10$minusyear convertible bonds at par on July$1,2022.$ Each bond has a par value of $ $1$ comma $800.$ The bonds include the option for bondholders to convert each bond into $60$$$1$ par value shares of common stock beginning two years after the date of issue. The market price of the stock at the time of issue is $ $34$ per share and the beneficial conversion option is valued at $ $72$ comma $000.$ On July$2,2024,$ when the market price of the stock is $ $44$ and the balance in the Discount account is $ $63$ comma $000,$ all of the bondholders convert the bonds. What is the proper entry to record the conversion of the$$ bonds?

Question content area bottom

Part $1$

A$.$

Date

Account

Debit

Credit

July$2,2024$

Bonds Payable

$540$ comma $000$

Add. Paidminusin Capitallong dashBene. Conv. Option

$72$ comma $000$

$$

$$Discount on Bonds Payable

$$

$63$ comma $000$

$$Common$$ Stock, $$1$ par, $18$ comma $000$ shares

$18$ comma $000$

$$Add$.$ Paidminusin Capital in Excess of Parminus Common

$531$ comma $000$

B$.$

Date

Account

Debit

Credit

July$2,2024$

Bonds Payable

$540$ comma $000$

Beneficial Conversion Option

$54$ comma $000$

$$Discount on Bonds Payable

$63$ comma $000$

$$Add$.$ Paidminusin Capital in Excess of Parminus Common

$531$ comma $000$

C$.$

Date

Account

Debit

Credit

July$2,2024$

Bonds Payable

$540$ comma $000$

Discount on Bonds Payable

$63$ comma $000$

$$

$$Common$$ Stock, $$1$ par, $18$ comma $000$ shares$$

$$

$18$ comma $000$

$$Add$.$ Paidminusin Capital in Excess of Parminus Common

$585$ comma $000$

D$.$

Date

Account

Debit

Credit

July$2,2024$

Bonds Payable

$540$ comma $000$

Discount on Bonds Payable

$72$ comma $000$

$$

$$Common$$ Stock, $$1$ par, $18$ comma $000$ shares

$$

$540$ comma $000$

$$Add$.$ Paidminusin Capitallong dashBene. Conv. Option

$72$ comma $000$