Question: On January 2 , 2 0 2 1 , Parson Inc. issued 1 0 - year convertible bonds at 1 0 5 . During 2

On January

2, 2021,

Parson Inc. issued

10 -

year convertible bonds at

105 .

During

2022,

all the bonds were converted into common shares. At conversion, the market price of Parson's common shares was

50 %

above the bonds' carrying value. Parson adheres to ASPE and used the zero equity method to record the bond issuance. On conversion, Parson would credit the Common Shares account with

Question

6

Answer

.

the face value of the bonds.

.

the carrying value of the bonds plus the balance in the related Contributed Surplus account.

.

the carrying value of the bonds.

.

the market value of the bonds.

.

The market price of the common shares issued.

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