Kern Company purchased bonds with a face amount of $400,000.Kern purchased the bonds at 102 and paid brokerage costs of $6,000.The amount to record as the cost of this debt investment is

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The cost of the debt investment includes the purchase price of the bonds and any additional costs incurred to acquire the investment. Kern purchased the bonds at 102% of the face value, which is $408,000 (102% of $400,000), and paid $6,000 in brokerage costs. Therefore, the total cost recorded should be $414,000.

Kern Company Purchased Bonds with a Face Amount of $400,000