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 What accounts would be debited for the $400,000 in the journal entry to record the investment? DATE DESCRIPTION PREF DEBIT CREDIT Jan. 1 (?) $400,000 (?) 4,500 (?) 404,500 Investment in Medford City Bonds Interest receivable Cash Bonds Payable O000

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 17MC: Huang Inc. issued 100 bonds with a face value of $1,000 and a 5-year term at $960 each. The journal...
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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
What accounts would be debited for the $400,000 in the journal entry to record the investment?
DATE
DESCRIPTION
PREF
DEBIT
CREDIT
Jan. 1
(?)
$400,000
(?)
4,500
(?)
404,500
Investment in Medford City Bonds
Interest receivable
Cash
Bonds Payable
O000
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 What accounts would be debited for the $400,000 in the journal entry to record the investment? DATE DESCRIPTION PREF DEBIT CREDIT Jan. 1 (?) $400,000 (?) 4,500 (?) 404,500 Investment in Medford City Bonds Interest receivable Cash Bonds Payable O000
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