Kendall Corp

question 95

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 Short-Term 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.

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Definitions:

Low-Income People

Individuals or groups who earn significantly less than the average income level in their society.

Price Ceilings

Government-imposed limits on how high a price can be charged for a product or service.

Equilibrium Price

The price at which the quantity of a good demanded by consumers matches the quantity supplied by producers, resulting in market stability.

Price Ceiling

A legal maximum price set by a government on certain goods and services, above which they cannot be sold.