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Steven Co. purchased 30, 10% Johnston Company bonds for $30,000
cash plus brokerage fees of $300. Interest is payable semiannually on
July 1 and January 1. The entry to record the purchase would include
debit to
a.
b.
c.
d.
b.
c.
d.
6.
When an investor owns between 20% and 50% of the common stock of a
corporation, it is generally presumed that the investor
a.
b.
a.
Cash
b.
Cash
1,130
Debt Investments
Gain on Sale of Debt Investments
Interest Revenue
1,040
60
30
Cash 1,130
Debt Investments
Interest Revenue
1,100
30
Cash
1,100
Debt Investments
Interest Revenue
1,040
60
c.
d.
3.
d.
a.
b.
c.
d.
Cost method
Equity method
Combination method
Market method
Answers
1.
4
7
c
b
b
2
5
8
b
c
c
3
6
d
d
5.
1,100
Debt Investments 1,100
4.
c.
d.
consolidated portfolio.
investment portfolio.
controlling interest.
debited for the book value of the bonds at the sale date.
credited for the cost of the bonds at the sale date.
credited for the fair value of the bonds at the sale date.
debited for the cost of the bonds at the sale date.
affiliated investment.
c
2
b
bad question 5
b
8
b
3
b
a or b 6.
d