Fogel Co. has $5,000,000 of 8% convertible bonds outstanding. Each $1,000 bond is convertible into 30 shares of $30 par value common stock. The bonds pay interest on January 31 and July 31. On July 31, 2012, the holders of $1,600,000 bonds exercised the conversion privilege. On that date the market price of the bonds was 105 and the market price of the common stock was $36. The total unamortized bond premium at the date of conversion was $350,000. Fogel should record, as a result of this conversion, a
A) credit of $272,000 to Paid-in Capital in Excess of Par.
B) credit of $240,000 to Paid-in Capital in Excess of Par.
C) credit of $112,000 to Premium on Bonds Payable.
D) loss of $16,000.