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Question
Ruben Company purchased $100,000 of Evans Company bonds at 100. Ruben later sold the bonds for $104,500 plus $500 in accrued interest. The journal entry for the sale of the bonds would be
a. debit Cash, $105,000; credit Investments—Evans Company Bonds, $104,500, and Interest Revenue, $500
b. debit Cash, $105,000; credit Investments—Evans Company Bonds, $100,000, and Gain on Sale of Investments, $5,000
c. debit Cash, $104,500, and Interest Receivable, $500; credit Investments—Evans Company Bonds, $100,000, Gain on Sale of Investments, $4,500, and Interest Revenue, $500
d. debit Cash, $105,000; credit Investments—Evans Company Bonds, $100,000, Gain on Sale of Investments, $4,500, and Interest Revenue, $500
Answer
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