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Question
Use this information for Pierce Company to answer the questions that follow.
On May 1, Pierce Company purchased $60,000 of Stanton Company’s 12% bonds at 100 plus accrued interest of $2,400. On June 30, Pierce received its first semiannual interest. On February 1, Pierce sold $50,000 of the bonds at 103 plus accrued interest.
The journal entry Pierce records on June 30 will include a
a. credit to Interest Revenue for $2,400
b. debit to Cash for $3,600
c. credit to Cash for $2,400
d. credit to Interest Receivable for $1,200
Answer
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