Kendall Corp

question 107

Multiple Choice

Kendall Corp.purchased at par value,$75,000 of Shrem Company's 8% bonds that mature in three-years.The bonds pay interest semiannually on June 1 and December 1.Kendall plans to hold the bonds until they mature.When the bonds mature,Kendall should prepare the following journal entry (assume the semiannual interest was separately recorded) :

• A)debit Long-Term Investments-HTM,$75,000; credit Cash,$75,000.
• B)debit Cash,$6,000; credit,Unrealized Gain-Equity,$6,000.
• C)debit Cash,$75,000; credit Debt Investments-HTM,$75,000.
• D)debit Unrealized Gain-Equity,$6,000; credit Cash,$6,000.
• E)debit Cash,$75,000; credit Long-Term Investments-Trading,$75,000.