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Milton Company purchased at face value

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Milton Company purchased at face value TRUE AND FALSE 1. At the time of acquisition of a debt investment, a. no journal entry is required. b. the cost principle applies. c. the Stock Investments account is debited when bonds are purchased. d. the Investment account is credited for its cost plus brokerage fees. 2. Which of the following is not a true statement regarding short-term debt investments? a. The securities usually pay interest. b. Investments are frequently government or corporate bonds. c. This type of investment must be currently traded in the securities market. d. Debt investments are recorded at the price paid less brokerage fees. 3. On January 1, 2013, Danner Company purchased at face value, a $1,000, 8% bond that pays interest on January 1 and July 1. Danner Company has a calendar year end. The entry for the receipt of interest on July 1, 2013, is a. Cash 40 Interest Revenue 40 b. Cash 80 Interest Revenue 80 c. Interest Receivable 40 Interest Revenue 40 d. Interest Receivable 80 Interest Revenue 80 4. On January 1, 2013, Danner Company purchased at face value, a $1,000, 10% bond that pays interest on January 1 and July 1. Danner Company has a calendar year end. The adjusting entry on December 31, 2013, is a. not required. b. Cash 50 Interest Revenue 50 c. Interest Receivable 50 Interest Revenue 50 d. Interest Receivable 50 Debt Investments 50 5. On January 1, 2013, Milton Company purchased at face value, a $1,000, 4% bond that pays interest on January 1 and July 1. Milton Company has a calendar year end. The entry for the receipt of interest on January 1, 2014 is a. Cash 40 Interest Revenue 40 b. Cash 40 Interest Receivable 40 c. Cash 20 Interest Revenue 20 d. Cash 20 Interest Receivable 20 Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help

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