An investor purchased at par value $75,000 of Cort\'s 8% bonds, that mature in t

Question

An investor purchased at par value $75,000 of Cort's 8% bonds, that mature in three-years. The bonds pay interest semiannually on June 1 and December 1. The investor plans to hold the bonds until they mature. When the bonds mature, the investor should prepare the following journal entry:
A. debit Long-Term Investments-HTM, $75,000; credit Cash, $75,000.
B. debit Cash, $6,000; credit, Unrealized Gain-Equity, $6,000.
C. debit Cash, $75,000; credit Long-Term Investments—HTM, $75,000.
D. debit Unrealized Gain-Equity, $6,000; credit Cash, $6,000.
E. debit Cash, $75,000; credit Long-Term Investments—Trading, $75,000.

Explanation / Answer

The answer is C. debit Cash, $75,000; credit Long-Term Investments-HTM, $75,000. Hope that helps, Rating appreciated!

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