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On January 1, 2017, Brooklyn Company purchases $80,000, 7% bonds at a price of 94 and a maturity date of January 1, 2027. Brooklyn Company

On January 1, 2017, Brooklyn Company purchases $80,000, 7% bonds at a price of 94 and a maturity date of January 1, 2027. Brooklyn Company intends to hold the bonds until maturity. Interest is paid semiannually, on January 1 and July 1. Brooklyn Company has a calendar year and uses the

straightminusline

amortization method for discounts and premiums. The adjusting entry to amortize the bond investment on December 31, 2017 is:

A.

debit Interest Receivable $2,800 and credit Interest Revenue $2,800.

B.

debit

HeldminustominusMaturity

Investment in Bonds $480 and credit Interest Revenue $480.

C.

debit Interest Receivable $5,600 and credit Interest Revenue $5,600.

D.

debit

HeldminustominusMaturity

Investment in Bonds $240 and credit Interest Revenue $240.

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