Landmark Corp.buys $300,000 of Schroeter Company's 8%,5-year bonds payable,at par value on September 1.Interest payments are made semiannually.Landmark plans to hold the bonds for the 5-year life.The journal entry to record the purchase should include:

Question

Quizplus · Accepted Answer

Landmark plans to hold the bonds until maturity, so the purchase should be recorded as a Held-to-Maturity (HTM) investment, which requires a debit to Debt Investments-HTM for the purchase amount.