Asked by Total Sport Productions on May 13, 2024
Verified
To record a bond investment made between interest payment dates, Investment in Bonds would be debited and Cash and Interest Revenue would be credited.
Investment In Bonds
This is the act of purchasing bonds as a means of investing money, typically for earning interest income and obtaining potential price appreciation.
Interest Revenue
Income earned from investments, loans, or other interest-bearing financial assets.
- Comprehend the methods involved in documenting bond investments and their associated interest.
Verified Answer
LT
Leticia TretoMay 18, 2024
Final Answer :
False
Explanation :
When recording a bond investment made between interest payment dates, Investment in Bonds would be debited and Cash would be credited for the purchase price plus any accrued interest since the last interest payment date. However, instead of crediting Interest Revenue, the accrued interest paid is credited to Interest Receivable or is debited to Bond Interest Expense (depending on the context of the transaction and the investor's accounting policies), reflecting the fact that this interest will be received as part of the next interest payment.
Learning Objectives
- Comprehend the methods involved in documenting bond investments and their associated interest.