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Leonard Technologies Invests $68,000 to Acquire $68,000 Face Value,10%,five-Year Corporate

question 52

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Leonard Technologies invests $68,000 to acquire $68,000 face value,10%,five-year corporate bonds on December 31,2014.The bonds will mature on December 31,2019.The bonds pay interest semiannually on December 31 and June 30 every year until maturity.Assume Leonard Technologies uses a calendar year.Based on the information provided,which of the following will be included in the journal entry for the transaction on December 31,2018?


Definitions:

Business Combination

A transaction in which an acquirer gains control of one or more businesses.

Consolidated Expenses

The total expenses of a group of companies after eliminating intercompany transactions, reported in consolidated financial statements.

Fair Value

An estimate of the price at which an asset or liability could be traded in a fair transaction between willing parties, other than in a forced or liquidation sale.

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