This Question: 1 pt 4 of 40 (3 complete) This Test: 40 pts possible Question Hel

Question

This Question: 1 pt 4 of 40 (3 complete) This Test: 40 pts possible Question Help On January 1, 2017, Ca mody Corp ration purchased 4% bonds with a fa evalue of S48 0 Ofor S60,000. Car mody Corporation i t paid semiannually on January 1 and July 1. The company uses the straight-ine amortization method for d dstohoid the bonds util to discounts and premiums. The journal entry on January 1,2017 is O A. debit Investment in Bonds for $48,000, debit Premium on Bonds for $2,000 and credit Intorest Revenue $50,000 O B. debit Investment in Bonds for S50,000 and credit Interest Revenue for SSO·000. O C. debit Held-to-Maturity Investment in Bonds for $48,000, debit Premium on Bonds for $2,000 and credit Cash for $50,000 O D. debit Held-to-Maturity Investment in Bonds for $50,000 and credt Cash for $50,000. Click to select your answer. MacBook A 80 FS F6 F7 F8 F9 F10 F11 112 fo

Explanation / Answer

Solution : answer is C.

Working:

Date Account Title Debit Credit Held to maturity investment in bond. Dr. 48,000 Premium on bonds Dr 2,000 To Cash 50,000

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