Use the Following Information for Questions

question 34

Multiple Choice

Use the following information for questions.
On January 1, 2018, Burkett Corporation purchased, as a long-term investment, a $25,000, 5% bond, for $21,595. At this time, the market rate of interest was approximately 7%. The bond pays interest on January 1 and July 1. On December 31, 2018, the fair value of the bonds was $23,950.
-What is the entry to record the purchase?

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Definitions:

Debt-Equity Ratio

An indicator showing the financing proportions of debt and equity used by a company for its assets.

Pro Forma

Pro Forma refers to financial statements or projections that are based on assumptions and estimates, often used to predict future financial performance.

Macroeconomic

Relating to the study of the behavior of the economy as a whole, including inflation, unemployment, and economic growth.

Industry Forecasts

Industry forecasts involve the analysis and prediction of future trends, performance, and behavior in a specific industry sector.