Question: The company has bonds payable with a total face value of $150,000 and a carrying value of $142,000. In addition, unpaid interest on the bonds

The company has bonds payable with a total face value of $150,000 and a carrying value of $142,000. In addition, unpaid interest on the bonds has been accrued in the amount of $8,000. The lender has agreed to the settlement of the bonds in exchange for 20,000 shares of $1 par common stock. The shares have a current market value of $140,000. Make the journal entry necessary on the books of the borrower to record this settlement of the bonds payable.

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