Halifax Company purchased $50,000 worth of bonds (par value)and held them to maturity.The journal entry at maturity should include a debit to Cash for $50,000 and a credit to Long-term Investment in Bonds for $50,000.

Question

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When a company purchases and holds bonds until maturity, the journal entry at maturity includes a debit to Cash for the full par value of the bonds and a credit to Long-term Investment in Bonds for the same amount. This represents the payment received by the company and the retirement of the bonds.

Halifax Company Purchased $50,000 Worth of Bonds (Par Value)and Held