On December 31, 2019, Dare had outstanding 8%, $2,000,000 convertible bonds maturing on December 31, 2023. Interest is payable annually on December 31. Each $1,000 bond is convertible into 60 shares of Dare’s $10 common stock. On January 2, 2021, when the Premium on Bonds Payable account balance was $45,000, an individual holding 200 of the bonds exercised the conversion privilege when the market value of Dare’s was $18 per share. Using the book value method, Dare’s entry to record the conversion should include a credit to Additional Paid-in Capital of:
a. $80,000
b. $84,500
c. $96,000
d. $125,000
