ACCOUNTING
Ace Hardware purchases 100, $1,000 face value bonds from AT&T which pay 6% semi-annually. Ace pays $90,000 for the bonds, which mature in 10 years.15. An acceptable journal entry to record the purchase isA.Investments — Bonds90,000Cash90,000B.Investments — Bonds100,000Cash100,000C.Investments — Bonds90,000Discount on Bonds10,000Cash100,000D.Investments — Bonds80,000Premium on Bonds10,000Cash90,00016.
After one year, the carrying value of the Bonds as shown on the Balance Sheet isA.$100,000.C.$90,000.B.$91,000.D.$89,000.
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