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Dynamic Software,Inc

question 180

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Dynamic Software,Inc.invests excess cash of $100,000 in corporate bonds on March 30,2019.The bonds mature 20 years from the date of purchase.Dynamic plans to hold the bonds until maturity and has the ability to do so.How does the March 30,2019 transaction affect the accounting equation?


Definitions:

SEC

The Securities and Exchange Commission, a U.S. government agency responsible for enforcing federal securities laws and regulating the securities industry.

Securities Act of 1934

A U.S. law enacted to regulate the secondary trading of securities (stocks, bonds, etc.), establishing rules and procedures to prevent fraud and manipulation.

Underwriting

Underwriters (investment bankers) purchase securities from the issuing company and resell them. Usually, a syndicate of investment bankers is organized behind a lead firm.

Investment Banking

A sector of banking focused on helping individuals, corporations, and governments raise capital through underwriting or acting as the client's agent in issuing securities.

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