1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
ser-zykov [4K]
3 years ago
11

On January 1, Skills Company purchased as a short-term investment a $1,000, 6% bondfor $1,000. The bond pays interest on January

1. The bond is sold on July 1 for $1,200plus 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...........................................................................1,200 Debt Investments .......................................................1,200B. Cash...........................................................................1,230 Debt Investments........................................................1,000 Gain on Sale of Debt Investments...............................200 Interest Revenue.........................................................30C. Cash............................................................................1,230 Debt Investments........................................................1,200 Interest Revenue.........................................................30D. Cash...........................................................................1,200 Debt Investments........................................................1,000 Gain on Sale of Debt Investments...............................200
Business
1 answer:
Arturiano [62]3 years ago
7 0

Answer:

Option (B) is correct.

Explanation:

Interest accrued for 6 months (January 1 to July 1):

= $1,000 × 6% × (6 ÷ 12)

= $30

This shall be credited to interest revenue as this is the income of the investor.

Sale value of investment:

= Bond selling price on July 1 + Interest accrued for 6 months

= $1,200 + $30

= $1,230

Gain on sale of investment:

= (Selling price - Purchase price) - Accrued interest

= ($1,230 - $1,000) - $30

= $200

Therefore, the Journal entry for this transaction is as follows:

Cash A/c                 Dr. $1,230

To debt investments                  $1,000

To Gain on sale of investment  $200

To Interest revenue                   $30

(To record the cash proceeds at the time the bond is sold)

You might be interested in
Sterling Company paid $1,200 for 3 months of rent on April 1 of the current year. On April 30, Sterling Company made an adjustin
irina [24]

Explanation:

the rent start on February first and paid 400 the expense rent are for 29 days on 13.7 USD per day

3 0
2 years ago
In 2014 the average cost of a four year college is $26,017. How much is a four year college expected to cost in 2034 based on 7%
Oksana_A [137]

Answer:

i think the answer is $27,350

Explanation:

i hope it help

6 0
3 years ago
Ford Motor Corporation is considering purchasing new technology that will increase productivity by twenty percent. If Ford Motor
Alborosie

Answer:

E. The demand for loanable funds increases.

5 0
3 years ago
You recently purchased a stock that is expected to earn 30 percent in a booming economy, 9 percent in a normal economy, and lose
sergiy2304 [10]
Took me a bit to understand what this is. I have no business sense at all.

Expected Rate of Return = 30%*5% + 9%*75% - 33% * (100 - 75 -5)%
Expected Rate of Return = 0.015 + 0.0675 - 33%*20%
Expected Rate of Return = 0.015 + 0.0675 - 0.066
Expected Rate of Return = 0.0165

This then is expressed as a %
0.0165 = 1.65 % Sounds like you are buying a US short term treasury.
If anyone else answers, take their answer.
 
3 0
3 years ago
Art is charged with kidnapping. After listening to all the evidence, 11 of the 12 jurors found him guilty. The twelfth juror vot
Likurg_2 [28]
No he will not be convicted
7 0
3 years ago
Other questions:
  • Why might the director of Moving Windmills have wanted to share William Kamkwamba’s story through film rather than though writin
    15·2 answers
  • Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses
    15·1 answer
  • Tracy's is a chain of hair dressing salons for women. they use television, magazines, radio, and newspapers to advertise their s
    9·1 answer
  • Which of the following statements is FALSE?
    6·1 answer
  • In its first year of operations, Woodmount Corporation reported pretax accounting income of $500 million for the current year. D
    15·1 answer
  • Unemployment caused by people voluntarily quitting work in order to seek more attractive employment is called
    10·1 answer
  • Recommend two aspects you would include when preparing a flyer
    14·1 answer
  • Using property she inherited, Lei makes a 2020 gift of $16,200,000 to her adult daughter, Doris. Neither Lei nor her husband, Gr
    6·1 answer
  • Where are goods and services sold to consumers?
    7·1 answer
  • Sales reported on the income statement were $690,000. The accounts receivable balance declined $39,000 over the year. Determine
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!