On September 30, 2019, Angel Outfitters invested in 10-year, $900,000, 7% bonds of ABC Co. These bonds were dated January 1, 2019, and pay interest annually on December 31. Angel paid face value plus accrued interest for these bonds, and intends to hold these bonds until maturity. Which of the following is the correct journal entry to record this investment? A) Held-to-Maturity Debt Investment - Cost Interest Receivable Cash 900,000 47,250 947,250 B) Held-to-Maturity Debt Investment - Cost 900,000 Discount on Held-to-Maturity Investment Cash 47,250 947,250 C) Available-for-Sale Debt Investment - Cost Discount on Held-to-Maturity Investment Cash D) Available-for-Sale Debt Investment - Cost Discount on Available-for-Sale Investment Cash 900,000 47,250 947,250 900,000 47,250 947,250

On September 30, 2019, Angel Outfitters invested in 10-year, $900,000, 7% bonds of ABC Co. These bonds were dated January 1, 2019, and pay interest annually on December 31. Angel paid face value plus accrued interest for these bonds, and intends to hold these bonds until maturity. Which of the following is the correct journal entry to record this investment? A) Held-to-Maturity Debt Investment - Cost Interest Receivable Cash 900,000 47,250 947,250 B) Held-to-Maturity Debt Investment - Cost 900,000 Discount on Held-to-Maturity Investment Cash 47,250 947,250 C) Available-for-Sale Debt Investment - Cost Discount on Held-to-Maturity Investment Cash D) Available-for-Sale Debt Investment - Cost Discount on Available-for-Sale Investment Cash 900,000 47,250 947,250 900,000 47,250 947,250

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1MC

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