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

question 52

Multiple Choice

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?

• A) a credit to Interest Revenue for $6800
• B) a debit to Interest Revenue for $6800
• C) a credit to Interest Revenue for $3400
• D) a debit to Interest Revenue for $3400

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Definitions:

Actual Authority

The express and implied powers given to an agent by a principal, allowing them to make legally binding decisions on the principal’s behalf.

Apparent Authority

Apparent authority refers to a situation where someone reasonably believes another has the authority to act on behalf of an organization due to the organization's actions or communications.

Principal

The primary individual or entity involved in a transaction or contract, or a sum of money lent or invested on which interest is paid.

Actual Authority

The express and implied powers granted by a principal to an agent to enter into contracts or make decisions on behalf of the principal.