Asked by
Jason Lawrence
on Dec 01, 2024
Verified
Landmark Corp.buys $300,000 of Schroeter Company's 8%,5-year bonds payable,at par value on September 1.Interest payments are made semiannually.Landmark plans to hold the bonds for the 5-year life.The journal entry to record the purchase should include:
A) A debit to Debt Investments-AFS $300,000.
B) A debit to Debt Investments-Trading $300,000.
C) A debit to Debt Investments-HTM $300,000.
D) A debit to Stock Investments-HTM $300,000.
E) A debit to Cash $300,000.
Debt Investments-HTM
Debt Investments-HTM (Held-to-Maturity) are debt securities a company intends and is able to hold until they mature, recorded at amortized cost.
Bonds Payable
Long-term liabilities representing money a company owes to holders of its bonds, which must be repaid at a future date.
- Master the methodologies involved in accounting for debt securities, covering the processes of purchase, interest revenue determination, and their eventual maturity.
Verified Answer
JK
Learning Objectives
- Master the methodologies involved in accounting for debt securities, covering the processes of purchase, interest revenue determination, and their eventual maturity.