Assume that on January 1, First Union Co. purchases for cash a $400,000 of Medford City 5% bond at 100 plus accrued interest of $4,500 as an investment on January 1. What accounts would be debited for the $10,000 to record the receipt of the first semiannual interest on July 1? DATE DESCRIPTION PREF DEBIT CREDIT July 1 (?) $10,000 (?) 4,500 (?) 5,500 Investment in Medford City Bonds Interest receivable Cash Interest revenue

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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Assume that on January 1, First Union Co. purchases for cash a $400,000 of Medford City 5% bond at 100 plus accrued interest of $4,500 as an investment on January 1.
What accounts would be debited for the $10,000 to record the receipt of the first semiannual interest on July 1?
DATE
DESCRIPTION
PREF
DEBIT
CREDIT
July 1
(?)
$10,000
(?)
4,500
(?)
5,500
Investment in Medford City Bonds
Interest receivable
Cash
Interest revenue
Transcribed Image Text:Assume that on January 1, First Union Co. purchases for cash a $400,000 of Medford City 5% bond at 100 plus accrued interest of $4,500 as an investment on January 1. What accounts would be debited for the $10,000 to record the receipt of the first semiannual interest on July 1? DATE DESCRIPTION PREF DEBIT CREDIT July 1 (?) $10,000 (?) 4,500 (?) 5,500 Investment in Medford City Bonds Interest receivable Cash Interest revenue
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