Debra Technologies Invests $50,000 to Acquire $50,000 Face Value,10%,five-Year Corporate

question 145

Multiple Choice

Debra Technologies invests $50,000 to acquire $50,000 face value,10%,five-year corporate bonds on December 31,2010.The bonds will mature on December 31,2015.The bonds pay interest semiannually on December 31 and June 30 every year until maturity.Assume Debra 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 31,2014?

• A)a credit to Interest Revenue for $5,000
• B)a debit to Interest Revenue for $5,000
• C)a credit to Interest Revenue for $2,500
• D)a debit to Interest Revenue for $2,500

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Definitions:

Center

The point that is equally distant from all points on the circumference of a circle or the surface of a sphere; in geometry, it's the midpoint of any shape or object.

Balancing Point

The point at which an object is in perfect equilibrium under the influence of gravity and does not tip or rotate.

Lever

A rigid bar resting on a pivot point (fulcrum), used to transmit force and movement, exemplifying the principle of mechanical advantage.

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