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On January 1, Barone Company purchased as a short-term investment a $1,000, 8% bond for $1,050. The bond pays interest on January 1 and July
On January 1, Barone Company purchased as a short-term investment a $1,000, 8% bond for $1,050. The bond pays interest on January 1 and July 1. The bond is sold on October 1 for $1,100 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....................... 1,100 debt investment........ 1,100 b. cash....................... 1,120 debt investment........ 1,050 gain on sale of debt investment 50 interest revenue 20 c. cash....................... 1,120 debt investments....... 1,100 interest revenue....... 20 d. cash....................... 1,100 debt investments....... 1,050 gain on sale of debt investment 50
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