An Investor Purchased $50,000 of 10 Year Bonds It Intends

question 86

True/False

An investor purchased $50,000 of 10 year bonds it intends to holdto maturity.The investor's journal entry to record the purchase should include a debit to Long-Term Investments for $50,000 and a credit to Cash for $50,000.

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Definitions:

Cash Dividend

A payment made by a corporation to its shareholders, usually in the form of cash, as a share of the company's profits.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership of a portion of a company, giving the holder voting rights.

Long-term Debt

Borrowed money that a company or individual must repay over a period longer than one year.

Equipment Trade

The act of exchanging one piece of business equipment for another, often to upgrade or replace assets.