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MAXImum [283]
3 years ago
14

On April 1, Alliance Company purchased $50,000 of Tetter Company's 12% bonds at 100 plus accrued interest of $2,000. On June 30,

Alliance received its first semiannual interest. On February 1, Alliance sold $40,000 of the bonds at 103 plus accrued interest. The journal entry Alliance will record on April 1 for the purchase of the bonds will include a:
Business
2 answers:
velikii [3]3 years ago
7 0

Answer:

The journal entry will include

Investments in debt securities - Tetter Company bonds (Dr) $50,000

Explanation:

Since the bonds was purchased as investments for $50,000 they will be an asset for the Alliance company and hence will be debited as per the accounting principle of debiting all incoming assets.Investment is a real account and it will be debited with the face value of $50,000. The bond will be recorded in Alliance's books at face value i.e $50,000.

The journal entry made in the books of Alliance Company at the time of purchase would have been:

Investments in debt securities - Tetter Company bonds (Dr) $50,000

laiz [17]3 years ago
7 0

Answer:

Dr Investment in bonds - Tetter Company 50,000

Dr Interest receivable 2,000

    Cr Cash 52,000

Explanation:

At April 1, Alliance Company purchased $50,000 worth of bonds at face value (100) plus $2,000 accrued interest.

The company paid in total $52,000 for the transaction, and it should have recorded $50,000 as investment in bonds + $2,000 as interest receivable.

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3 years ago
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stiv31 [10]

Answer:

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Explanation:

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3 0
3 years ago
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When a firm practices perfect price​ discrimination, it A. charges each consumer her reservation price. B. captures all the soci
frosja888 [35]

Answer:

Option E All the statements are correct.

Explanation:

The reason is that the company which practices perfect price discrimination is the one which is charging different to different customers. So the prcie that the firm charges the price that the customer is willing to pay. This is very common in markets the seller present a number of products and quotes a higher price and then have a healthy conversation with you and then agrees the price. Some people agree at the spot and some agree by heavy debate and forces the seller to reduce the cost otherwise the customer is going away. So this means the company is charging reservation price, takes all the consumer surplus from consumer and captures the social gain which is the maximum gain possible to extract from the person.  

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4 0
3 years ago
Knight Company reports the following costs and expenses in May.
Marina86 [1]

Answer:

A. Consider all indirect manufacturing costs

B. Consider all manufacturing costs

C. Consider non manufacturing costs

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Consider all indirect manufacturing costs

B) Product costs.

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