FGH purchased a $100,000, 6 percent bond at 104 plus $2,000 accrued interest. The bond pays semi-annual interest on each 6/30 and 12/31. FGH paid a brokerage fee of $1,500. What entry should FGH make to record this long-term investment? FGH adheres to ASPE. $\begin{array}{|l|l|r|r|}
\hline 1)&\text { investment in FVTPL securities } & & \
\hline &\text { Cash } & 101,500 & \
\hline 2)&\text { nuestment in FVTPL securities } && 101,500 \
\hline& \text { Brokerage expense } & 104,000 & \
\hline &\text { Cash } && 1,500 \
\hline 3)&\text { Inestment in FVTPL securities } & 105,500 & \
\hline &\text { Investment rec eivable } & 2,000 & \
\hline &\text { Cash } & & 107,500 \
\hline 4)&\text { investment in FVTPL securities } & 105,500 & \
\hline &\text { Interest receivable } & 2,000 & \
\hline &\text { Cash } & & 107,500 \
\hline
\end{array}$

Question

FGH purchased a $100,000, 6 percent bond at 104 plus $2,000 accrued interest. The bond pays semi-annual interest on each 6/30 and 12/31. FGH paid a brokerage fee of $1,500. What entry should FGH make to record this long-term investment? FGH adheres to ASPE. $\begin{array}{|l|l|r|r|}
\hline 1)&\text { investment in FVTPL securities } & & \
\hline &\text { Cash } & 101,500 & \
\hline 2)&\text { nuestment in FVTPL securities } && 101,500 \
\hline& \text { Brokerage expense } & 104,000 & \
\hline &\text { Cash } && 1,500  \
\hline 3)&\text { Inestment in FVTPL securities } & 105,500 & \
\hline &\text { Investment rec eivable } & 2,000 & \
\hline &\text { Cash } & & 107,500 \
\hline 4)&\text { investment in FVTPL securities } & 105,500 & \
\hline &\text { Interest receivable } & 2,000 & \
\hline &\text { Cash } & & 107,500 \
\hline
\end{array}$

Quizplus · Accepted Answer

The correct entry is to debit Investment in FVTPL securities for $105,500, debit Investment receivable for $2,000, and credit Cash for $107,500. This entry records the purchase of the bond at a cost of $104,000 plus accrued interest of $2,000, and the payment of a brokerage fee of $1,500.

FGH Purchased a $100,000, 6 Percent Bond at 104 Plus