book value method Definition | Business Dictionaries from
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Business Glossary


Business Definition for: book value method
book value method

manner of accounting for a bond conversion into stock. The entry is to debit bonds payable and premium on bonds payable (or credit discount on bonds payable) and credit common stock and premium on common stock. Note that the total credit is based on the bond's book value. No gain or loss is recognized. Other entries may also be involved such as recording the interest payment prior to the bond conversion.

See also market value method
Copyright © 2005, 2000, 1995, 1987 by Barron's Educational Series, Inc., Reprinted by arrangement with Publisher.


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