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

---

Definitions:

The National Post

A Canadian English-language national newspaper.

Term Structure

Pertains to the connection between interest rates or yields on bonds and varying durations or maturities.

Interest Rates

The percentage charged on the total amount of borrowed money or paid on deposited funds.

Bond Rating Agencies

Organizations that assess the creditworthiness of both corporate and governmental bonds, issuing ratings that affect interest rates and investment attractiveness.