Jacks Corporation purchases $200,000 bonds plus accrued interest for 2 months of $2,000 from Kennedy Company on March 1. The bonds have an annual interest rate of 6% payable on June 30 and December 31. The entry to record the purchase of the bonds would include: a. Interest receivable debit $2,000; b. Investment in Bonds debit $202,000; c. Cash credit $200,000; d. Interest Revenue credit $2,000 Solution Answer: a.Interest receivable debit $2,000.

1. Jacks Corporation purchases $200,000 bonds plus accrued interest for 2 months of $2,000 from
Kennedy Company on March 1. The bonds have an annual interest rate of 6% payable on June
30 and December 31. The entry to record the purchase of the bonds would include:
a. Interest receivable debit $2,000; b. Investment in Bonds debit $202,000; c. Cash credit
$200,000; d. Interest Revenue credit $2,000
Solution
Answer: a.Interest receivable debit $2,000