An investor purchased $50,000 of 10-year bonds it intends to hold to maturity.The investor's journal entry to record the purchase is a debit to Debt Investments-HTM for $50,000 and a credit to Cash for $50,000.

Question

Quizplus · Accepted Answer

This is the correct journal entry for purchasing bonds intended to be held to maturity. The debit is to the Debt Investments Held-to-Maturity (HTM) account and the credit is to the Cash account for the same amount of $50,000.

An Investor Purchased $50,000 of 10-Year Bonds It Intends to Hold