Barr Company acquires 50, 10%, 5 year, €1,000 Community bonds on January 1, 2014 for €50,000. The journal entry to record this investment includes a debit to

Question

Quizplus · Accepted Answer

The investment is in Community bonds, which are debt instruments, so the debit should be to Debt Investments for the purchase price of €50,000. The other options (A, C, D) are incorrect as they do not reflect the correct accounting treatment for this investment.

Barr Company Acquires 50, 10%, 5 Year, €1,000 Community Bonds