Answer: Credit of $217480 to Paid-in Capital in Excess of Par
Explanation:
The following information is given in the question as:
Debit: Bonds payable = $1,250,000
Debit: Premium on bonds payable = $92480
Credit: Common stock = $1,125,000
Credit: Paid in capital in excess of Par = $217480
The above were calculated as:
Common stock = ($1250,000/$1,000) × 30 × 30
= $1250 × 90
= $1,125,000
% Conversion will be:
= $1,250,000 / $3960000 = 0.32
Unamortized bond premium will then be:
= 0.32 × $289,000
= $92,480
Paid in capital in excess of par will be:
= $1,250,000 + $92,480- $1,125,000
= $217,480
Therefore, the answer will be to
"Credit of $217480 to Paid-in Capital in Excess of Par"
