On January 1, 2014, Bregeut Company, a calendar year corporation, purchased 900 of the $1,000 face value, 9% bonds of Clariant Incorporated, for CHF900,000. The bonds, which mature on January 1, 2019, pay interest semiannually on July 1 and January 1. The entry on Bregeut's books to record the acquisition will include

Question

Quizplus · Accepted Answer

When a company purchases debt investments such as bonds, the appropriate account to debit is Debt Investments. The purchase price of CHF900,000 would be recorded as the debit amount. The other answer choices are not appropriate for this transaction as Bonds Payable is used to record a company's own debt issuance, Interest Receivable is used to record interest owed to the company, and Interest Revenue is used to record interest earned by the company from its investments.

On January 1, 2014, Bregeut Company, a Calendar Year Corporation