Ruben Company purchased $100,000 of Evans Company bonds at 100 plus $1,500 in accrued interest. The bond interest rate is 8% and interest is paid semi-annually. The journal entry to record the purchase would be:
A) Debit: Investment in Bonds $101,500; Credit: Cash $101,500
B) Debit: Investment in Bonds $100,000; Credit: Interest Revenue $1,500 and Cash $98,500
C) Debit: Investment in Bonds $100,000 and Interest Receivable $1,500; Credit: Cash $101,500
D) Investment in Bonds $100,000; Credit: Cash $100,000
Correct Answer:
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