Seamark buys $300,000 of Eider's 8% five-year bonds payable at par value. Interest payments are made semiannually. Seamark plans to hold the bonds for the five year life. The journal entry to record the purchase should include:

Question

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Seamark plans to hold the bonds for the five-year life, which means they are classified as Held-To-Maturity (HTM) investments. Therefore, the purchase should be recorded with a debit to Long-Term Investments-HTM for $300,000.

Seamark Buys $300,000 of Eider's 8% Five-Year Bonds Payable at Par