Question

In: Accounting

1. Watt Co. purchased $300,000 of bonds for $315,000. If Watt intends to hold the securities...

1. Watt Co. purchased $300,000 of bonds for $315,000. If Watt intends to hold the securities to maturity, the entry to record the purchase of the investment includes

  1. A credit to Investments in bonds at $300,000.
  2. A credit to Discount on Investments of $15,000.
  3. A credit to Cash at $300,000.
  4. A credit to Cash at $315,000.

2. When a product or service is delivered for which a customer advance has been previously received, the appropriate journal entry includes:

A. A debit to a revenue and a credit to a liability account.

B. A debit to a revenue and a credit to an asset account.

C. A debit to an asset and a credit to a revenue account.

D. A debit to a liability and a credit to a revenue account.

Solutions

Expert Solution

1.

Accounts Debit Credit
Investment in bonds 300000
Discount on bonds 15000
Cash 315000

Option D is correct answer.

2.

Accounts Debit Credit
Advance from customer
Revenue

Option D is correct answer.

ekkarill92 answered 3 years ago
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