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On December 31, Lowland, Inc., converts its $900,000 par value bonds (carrying value also $900,000) into 90,000 shares of $6 par value common stock. Complete the necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

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Answer:

Journal Entry to record the transaction

                                       Dr.                Cr.

Bond payable            $900,000

Common Share                            $540,000

Add-in- Capital common share   $360,000

Explanation:

Common share = 90,000 x $6 = $540,000

Add-in- Capital common share = $900,000 - $540,000

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