On January 1, Skills Company purchased as a short-term investment a $1,000, 6% bond for $1,000. The bond pays interest on January 1. The bond is sold on July 1 for $1,200 plus accrued interest. Interest has not been accrued since the last interest payment date. What is the entry to record the cash proceeds at the time the bond is sold? A) Cash 1,200 B) Cash 1,230 C) Cash D) Cash Debt Investments Debt Investments Gain on Sale of Debt Investments Interest Revenue Debt Investments Interest Revenue Debt Investments Gain on Sale of Debt Investments 1,230 1,200 1,200 1,000 200 30 1,200 30 1,000 200

On January 1, Skills Company purchased as a short-term investment a $1,000, 6% bond for $1,000. The bond pays interest on January 1. The bond is sold on July 1 for $1,200 plus accrued interest. Interest has not been accrued since the last interest payment date. What is the entry to record the cash proceeds at the time the bond is sold? A) Cash 1,200 B) Cash 1,230 C) Cash D) Cash Debt Investments Debt Investments Gain on Sale of Debt Investments Interest Revenue Debt Investments Interest Revenue Debt Investments Gain on Sale of Debt Investments 1,230 1,200 1,200 1,000 200 30 1,200 30 1,000 200

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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