For instructor use only h 10 reporting and analyzing

FOR INSTRUCTOR USE ONLY
H-10

Reporting and Analyzing Investments
52. At the time of acquisition of a debt investment
FSA
53. On January 1, 2022, the LaRoche Company purchased at face value, a $1,000, 4%,
bond that pays interest on January 1. LaRoche Company has a calendar year end. The
entry for the receipt of interest on January 1, 2023, is
54. On January 1, 2022, the LaRoche Company purchased at face value, a $1,000, 4%,
bond that pays interest on January 1. LaRoche Company has a calendar year end. The
adjusting entry on December 31, 2022, is
55. On January 1, 2022, the LaRoche Company purchased at face value, a $1,000, 5%,
bond that pays interest on January 1. LaRoche Company has a calendar year end. The
entry for the receipt of interest on January 1, 2023 is
a. Cash 55
Interest Revenue 55
b. Cash 55
Interest Receivable 55
c. Cash 50
Interest Revenue 50
d. Cash 50
Interest Receivable 50
Ans: D, LO: 1, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC:
Problem Solving, IMA: FSA
Solution: $1,000 × .05  $50
(Face val. × int. rate)