Barr Company acquires 60, 10%, 5 year, $1,000 Community bonds on January 1, 2010 for $61,250. This includes a brokerage commission of $1,250.
The journal entry to record this investment includes a debit to

Question

Quizplus · Accepted Answer

The journal entry to record this investment would include a debit to Debt Investments for the purchase price of $61,250, which includes the brokerage commission. This is because the company is acquiring community bonds, which are classified as debt securities. The cash account would also be credited for the same amount. Therefore, the best choice is option B.

Barr Company Acquires 60, 10%, 5 Year, $1,000 Community Bonds