Use the Following Information for Questions

question 89

Multiple Choice

Use the following information for questions
On January 1, 2022, Warner Inc.purchased 3.5%, $50,000 face value Jackson Corp.bonds at face value.Interest is payable semi-annually on July 1 and January 1.The bonds are classified as trading investments.The bonds were sold on July 2, 2022 for $53,000.
-Warner's entry to record the receipt of the July 1 interest payment would include a

• A)debit to Interest Expense for $875.
• B)credit to Interest Income for $875.
• C)credit to Interest Income for $1,750.
• D)credit to Trading Investments for $875.

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Definitions:

Competition

The rivalry among businesses to attract customers and achieve market dominance.

Quoting Prices

The action of providing a prospective customer with a price at which a seller agrees to sell goods or services.

Excess Capacity

The situation where a company's production facilities are capable of producing more than the demand for its products.

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor.