Answer:
Dr bonds payable $3,000,000
Cr common stock $1,000,000
Cr paid in capital in excess of par val.-common stock($3m-$1m) $2,000,000
Explanation:
The conversion means that the bonds payable account is debited since the obligation has now been settled by a way of giving common stock in lieu.
The credit entries would comprise of par value of the conversion which is $1 par value multiplied by number of common stock of 1,000,000 which gives $1,000,000 while the remaining balance is credited to paid-in capital in excess-common stock
