Kendall Corp

question 13

Multiple Choice

Kendall Corp.purchased at par value,$160,000 of Barker Company's 7% bonds that mature in 10 months.The bonds pay interest semiannually on June 1 and December 1.Kendall plans to hold the bonds until they mature.The journal entry to record Kendall's purchase of the bonds is:

• A)debit Debt Investments-HTM $160,000; credit Cash,$160,000.
• B)debit Cash,$169,333; credit,Short-Term Investments-HTM $169,333.
• C)debit Cash,$160,000; credit Short-Term Investments-HTM $160,000.
• D)debit Long-Term Investments-HTM $160,000; credit Cash $160,000.
• E)debit Cash,$160,000; credit Long-Term Investments-HTM $160,000.

Understand the fundamental principles of negotiable instruments.

Differentiate between the roles and obligations of parties involved in negotiable instruments.

Recognize the requirements for an instrument to be negotiable under the UCC.

Identify the characteristics and types of negotiable instruments.

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Definitions:

Net Income

The net income of a business once all deductions, including expenses, taxes, and other costs, are made from its total earnings.

Selling Price

The price at which goods or services are offered to consumers.

Fixed Costs

Expenses that do not change with the level of production or business activity, such as rent or salaries.

Variable Expenses

Expenses that vary in direct proportion to changes in an activity or production level, similar to variable costs.