Question
On September 1, 2018, Ellicott Company acquired 1,200, $1,000, 6% bonds at 95 plus accrued interest. The bonds were dated May 1, 2018, and mature
On September 1, 2018, Ellicott Company acquired 1,200, $1,000, 6% bonds at 95 plus accrued interest. The bonds were dated May 1, 2018, and mature on April 30, 2024, with interest paid each October 31 and April 30. The bonds will be added to Ellicotts available-for-sale portfolio. The preferred entry to record the purchase of the bonds on August 1, 2018 is
| a. | Debt Investments .................................................................... 1,164,000 Cash ........................................................................... 1,164,000
| |
| b. | Debt Investments .................................................................... 1,164,000 Interest Revenue...................................................................... 36,000 Cash............................................................................ 1,200,000
| |
| c. | Debt Investments .................................................................... 1,140,000 Interest Revenue...................................................................... 24,000 Cash............................................................................ 1,164,000
| |
| d. | Debt Investments .................................................................... 1,140,000 Cash............................................................................ 1,140,000 |
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Management Accounting
Authors: Will Seal, Carsten Rohde, Ray Garrison, Eric Noreen
6th Edition
0077185536, 978-0077185534
