A Company Paid $37,800 Plus a Broker's Fee of $525

question 181

Multiple Choice

A company paid $37,800 plus a broker's fee of $525 to acquire 8% bonds with a $40,000 maturity value as a long-term investment.The company intends to hold the bonds to maturity.The correct entry to record the purchase of the bond investment is:

• A)Debit Debt Investments−HTM $37,800; credit Cash $37,800.
• B)Debit Debt Investments−HTM $38,325; credit Cash $38,325.
• C)Debit Cash $40,000; credit Debt Investments−HTM $40,000.
• D)Debit Debt Investments−HTM $37,800; debit Investment Expense $525; credit Cash $38,325
• E)Debit Debt Investments−HTM $37,800; debit Loss on Investment $525; credit Cash $38,325.

---

Definitions:

Vitruvian Man

A drawing by Leonardo da Vinci illustrating the ideal human body proportions based on the writings of the ancient Roman architect Vitruvius.

Method-Of-Place Technique

Also known as the loci method, a mnemonic strategy using visualization of familiar spatial environments to recall information.

Stacking Technique

A productivity method where tasks are grouped and tackled in sequence or simultaneously to maximize efficiency.

Acronym

A word formed from the first letter of a series of other words.