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pickupchik [31]
3 years ago
10

On March 31, year 1, 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 is correct for an effect of this conversion?
A. Stockholders' equity is increased.
B. Additional paid-in capital is decreased.
C. Retained earnings is increased.
D. A loss is recognized
Business
1 answer:
larisa86 [58]3 years ago
6 0

Answer:

A. Stockholders' equity is increased.

Explanation:

In this scenario, the correct statement for an effect of this conversion would be that the Sockholders' equity is increased. In such a situation, a sockholders' equity will always increase since debt is being converted into equity. This applies regardless of the method that was used for accounting the conversion of bonds. While retained earnings would not move at all in a conversion of bonds, and a gain or loss on such a debt would only be recognized under the market value approach.

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The fact that most people make some decisions based on intuition rather than calculation is: Select one: a. irrational, because
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c. consistent with the cost-benefit model because most people intuitively weigh costs and benefits

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Also is important to notice intuition takes a role when there are shades in the information, the effect on the personnel and when not all information is available.

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You are trying to find out how high you have to pitch a water balloon in order for it to burst when it hits the ground. You disco
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17.15 m/s

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The final velocity, the velocity of the ballon when it hits the ground is 17.15m/s.

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