Kendall Corp.purchased at par value $160,000 of Barker Company's 7% bonds that mature in 10 months.The bonds pay interest semiannually on June 1 and December 1.Kendall plans to hold the bonds until they mature.The journal entry to record Kendall's purchase of the bonds is:
A)debit Short-Term Investments-HTM $160,000;credit Cash,$160,000.
B)debit Cash,$169,333;credit,Short-Term Investments-HTM $169,333.
C)debit Cash,$160,000;credit Short-Term Investments-HTM $160,000.
D)debit Long-Term Investments-HTM $160,000;credit Cash $160,000.
E)debit Cash,$160,000;credit Long-Term Investments-HTM $160,000.

Question

Quizplus · Accepted Answer

Kendall Corp. purchased the bonds at par value and plans to hold them until maturity, which is less than a year away, so they are classified as short-term investments held-to-maturity (HTM).