Question

Key Company acquires 60, 10%, 5 year, $1,000 Community bonds on January 1, 2012 for $61,250. This includes a brokerage commission of $1,250. The journal entry to record this investment includes a debit to Group of answer choices Debt Investments for $60,000. Debt Investments for $61,250. Cash for $61,250. Stock Investments for $60,000.

Answer 1

Debt Investments for $61,250

Step-by-step explanation:

When the investment is recorded so here the debt investment should be debited and cash should be credited for $61,250. The investment would be recorded at cost basis also the brokerage represent the investment part

So the journal entry is

Debt investment Dr $61,250

To Cash $61,250

(Being cash paid)