FGH purchased a $100,000,6 percent bond at 104 plus $2,000 accrued interest.The bond pays semi-annual interest on each 6/30 and 12/31.FGH paid a brokerage fee of $1,500.What entry should FGH make to record this long-term investment? FGH adheres to ASPE. $\begin{array}{lll}
\text {(1) Investment in FVTPL securities }&101,500\
\text {Cash }&&101,500\
\text {(2) Investment in FVTPL securities }&104,000\
\text {Brokerage expense. }&1,500\\text { Cash.}&&105,500\
\text { (3) Investment in FVTPL securities}&105,500\
\text {Investment receivable. }&2,000\\text { Cash}&&107,500\
\text {(4) Investment in FVTOCI securities }&105,500\
\text {Interest receivable}&2,000\\text {Cash }&&107,500\
\end{array}$

Question

Quizplus · Accepted Answer

The total cash paid is $107,500, which includes the bond price at 104% ($104,000), accrued interest ($2,000), and brokerage fee ($1,500). The investment is recorded at $105,500, and the accrued interest is recorded separately as an investment receivable.

FGH Purchased a $100,000,6 Percent Bond at 104 Plus $2,000