Freddy, Inc. had outstanding 10 percent, $1,000,000 face value, convertible bonds maturing on December 31, 2017. Interest is paid December 31 and June 30. After amortization through June 30, 2014, the unamortized balance in the bond premium account was $30,000. On that date, bonds with a face amount of $500,000 were converted into 20,000 shares of $20 par common stock. Recording the conversion by using the carrying value of the bonds.

a.	Prepare the journal entry to record the conversion of the bonds for common stock.

Answer rating: 100% (QA)

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