1) A company purchased $60,000 of 5% bonds on May 1 at par value. The bonds pay interest on February 1 and August 1. The amount of interest accrued on December 31 (the company’s year-end) would be
2) Hamilton Company owns 88,200 of Hennie Company’s 180,000 outstanding shares of common stock. Hennie Company pays $30,000 in total cash dividends to its shareholders. Hamilton’s entry to record this transaction should include a
A.Credit to Long-Term investments for $14,700
B.Credit to Dividend Revenue for $30,000
C.Debit to Dividend Revenue for $14,700
D.Debit to Interest Revenue for $14,700
E.Credit to Long-Term Investments for $30,000
3) On April 18, Riley Co. made a short-term investment in 300 common shares of XLT Co. The purchase price is $42 per share and the brokerâ€™s fee is $250. The intent is to actively manage these shares for profit. On May 30, Riley Co. receives $1 per share from XLT in dividends.