On August 1, 2021, Crane Company acquired 1310, $1000, 9% bonds at 97 plus accrued interest. The bonds were dated May 1, 2018, and mature on April 30, 2027, with interest paid each October 31 and April 30. The bonds will be added to Crane’s available-for-sale portfolio. The preferred entry to record the purchase of the bonds on August 1, 2021 is a. Debt Investments 1310000 Interest Revenue 29475 Discount on Debt Investments 39300 Cash 1300175 b. Debt Investments 1300175
On August 1, 2021, Crane Company acquired 1310, $1000, 9% bonds at 97 plus accrued interest. The bonds were dated May 1, 2018, and mature on April 30, 2027, with interest paid each October 31 and April 30. The bonds will be added to Crane’s available-for-sale portfolio. The preferred entry to record the purchase of the bonds on August 1, 2021 is a. Debt Investments 1310000 Interest Revenue 29475 Discount on Debt Investments 39300 Cash 1300175 b. Debt Investments 1300175
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On August 1, 2021, Crane Company acquired 1310, $1000, 9% bonds at 97 plus accrued interest. The bonds were dated May 1, 2018, and mature on April 30, 2027, with interest paid each October 31 and April 30. The bonds will be added to Crane’s available-for-sale portfolio. The preferred entry to record the purchase of the bonds on August 1, 2021 is
a.
Debt Investments | 1310000 | |
Interest Revenue | 29475 | |
Discount on Debt Investments | 39300 | |
Cash | 1300175 |
b.
Debt Investments | 1300175 | |
Cash | 1300175 |
c.
Debt Investments | 1270700 | |
Interest Receivable | 29475 | |
Cash | 1300175 |
d.
Debt Investments | 1270700 | |
Interest Revenue | 29475 | |
Cash | 1300175 |
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