On January 1, Bay View Company Purchased as an Investment

question 83

Short Answer

On January 1, Bay View Company purchased as an investment a $1,000, 6% bond for $1,000. The bond pays interest on January 1 and July 1. The bond is sold on September 1 for $1,050 plus accrued interest. Interest has not been accrued since the last interest payment date. What is the entry to record the cash proceeds at the time the bond is sold?

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Definitions:

Marginal Product

The marginal product is the additional output resulting from a one-unit increase in the use of a variable input while holding other inputs constant.

Wage Rate

The amount of compensation that workers receive in exchange for their labor per unit of time.

Weak Axiom

A fundamental principle in consumer theory that if a consumer chooses bundle A over bundle B when both are affordable, then the consumer will not choose B over A if A's price decreases or B's price increases, all else being equal.

Profit Maximization

The process by which a firm determines the price and output level that returns the greatest profit.