高頓網校CMA責任小編為各位考生每天整理一道習題，你答對了嗎？
　　On March 31, Ashley, Inc.'s bondholders exchanged their convertible bonds for common stock. The carrying amount of these bonds on Ashley's books was less than the market value but greater than the par value of the common stock issued. If Ashley used the book value method of accounting for the conversion, which of the following statements correctly states an effect of this conversion?
　　a. Stockholders' equity is increased.
　　b. Additional paid-in capital is decreased.
　　c. Retained earnings is increased.
　　d. An extraordinary loss is recognized.
　　Explanation
　　Choice "a" is correct. Under the book value method of exchanging convertible bonds for stock, the book value of the bonds is reallocated to the par value and the additional paid-in capital accounts of the common stock. Thus, stockholders' equity is increased.
　　Choice "b" is incorrect. Converting bonds to common stock either has no effect on additional paid-in capital (if the bonds' book value equaled the common stocks' par value) or increases additional paid-in capital.
　　Choice "c" is incorrect. Only the bond accounts and the common stock accounts are affected under the book value method of exchanging convertible bonds for common stock.
　　Choice "d" is incorrect. No gain or loss is recognized under the book value method.
　　高頓網校免費題庫，通過針對性地講解、訓練、答疑、?？?，對學習過程進行全程跟蹤、專家權威解析與指導，幫助考生全面提升備考效果。