Kendall Corp. purchased at par value $160,000 of Barker Company's 7% bonds that mature in 10 months. The bonds pay interest semiannually on June 1 and December 1. Kendall plans to hold the bonds until they mature. The journal entry to record Kendall's purchase of the bonds is:
A) debit Short-Term Investments-HTM $160,000; credit Cash, $160,000.
B) debit Long-Term Investments-HTM $160,000; credit Cash $160,000.
C) debit Cash, $160,000; credit Short-Term Investments-HTM $160,000.
D) debit Cash, $169,333; credit, Short-Term Investments-HTM $169,333.
E) debit Cash, $160,000; credit Long-Term Investments-HTM $160,000.
Correct Answer:
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