Answered

Discover a wealth of knowledge at Westonci.ca, where experts provide answers to your most pressing questions. Discover the answers you need from a community of experts ready to help you with their knowledge and experience in various fields. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform.

Amex Corporation invests excess cash to purchase $25,000 in corporate bonds on March 30, 2018. In addition to the $25,000, Amex also paid a brokerage fee of $1,000. Amex intends to hold the bonds until maturity and has the ability to do so. When the bonds mature on March 30, 2020, Amex plans to use the cash for its business expansion. Which of the following is included in the journal entry on March 30, 2018?
a. a debit to Held-to-Maturity Debt Investments for $25,000.
b. a debit to Held-to-Maturity Debt Investments for $26,000 for $26,00.
c. a debt to Trading-Debt Investments for $25,000.
d. a debt to Trading-Debt Investments for $35,000.

Sagot :

Tundexi

Answer:

b. a debit to Held-to-Maturity Debt Investments for $26,000

Explanation:

Investment in corporate bonds is considered as Held-to-Maturity Debt investments.

Date           Accounts Title and Explanation                Debit       Credit

30 Mar 18   Held-to-Maturity Debt investments          $26,000

                   [$25,000 + $1,000)

                           Cash                                                                     $26,000

                  (To record an investment in bonds)

Therefore, in the journal entry, it is debited to Held-to-Maturity Debt investments for $26,000

Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. Find reliable answers at Westonci.ca. Visit us again for the latest updates and expert advice.