Question : 69.Roe Corporation owns 2,000 shares of WRJ Corporation stock. WRJ : 1236500

69.Roe Corporation owns 2,000 shares of WRJ Corporation stock. WRJ Corporation has 25,000 shares of stock outstanding. WRJ paid $4 per share in cash dividends to its stockholders. The entry to record the receipt of these dividends is:   

A.Debit Cash, $8,000; credit Long-Term Investments, $8,000.

B.Debt Long-Term Investment, $8,000; credit Cash, $8,000.

C.Debit Cash, $8,000; credit Dividend Revenue, $8,000.

D.Debit Unrealized Gain-Equity, $8,000; credit Cash, $8,000.

E.Debit Cash, $8,000; credit Unrealized Gain-Equity, $8,000.

2,000 shares * $4 = $8,000

70.A company purchased $60,000 of 5% bonds on May 1 at par value. The bonds pay interest on March 1 and September 1. The amount of interest accrued on December 31 (the company’s year-end) would be:   

A.$1,000.

B.$500.

C.$1,250.

D.$2,500.

E.$1,500.

71.A company paid $37,800 plus a broker’s fee of $525 to acquire 8% bonds with a $40,000 maturity value. The company intends to hold the bonds to maturity. The cash proceeds the company will receive when the bonds mature equal:   

A.$37,800.

B.$38,325.

C.$40,000.

D.$40,525.

E.$43,200.

72.A company paid $37,800 plus a broker’s fee of $525 to acquire 8% bonds with a $40,000 maturity value as a long-term investment. The company intends to hold the bonds to maturity. The correct entry to record the purchase of the bond investment is:    

A.Debit Long-Term Investments—HTM $37,800; credit Cash $37,800.

B.Debit Long-Term Investments—HTM $38,325; credit Cash $38,325.

C.Debit Cash $40,000; credit Long-Term Investments—HTM $40,000.

D.Debit Long-Term Investments—HTM $37,800; debit Investment Expense $525; credit Cash $38,325.

E.Debit Long-Term Investments—HTM $37,800; debit Loss on Investment $525; credit Cash $38,325.

73.Kendall Corp. purchased at par value $75,000 of Shrem Company’s 8% bonds that mature in three-years. The bonds pay interest semiannually on June 1 and December 1. Kendall plans to hold the bonds until they mature. When the bonds mature, Kendall should prepare the following journal entry:    

A.debit Long-Term Investments—HTM, $75,000; credit Cash, $75,000.

B.debit Cash, $6,000; credit, Unrealized Gain-Equity, $6,000.

C.debit Cash, $75,000; credit Long-Term Investments—HTM, $75,000.

D.debit Unrealized Gain-Equity, $6,000; credit Cash, $6,000.

E.debit Cash, $75,000; credit Long-Term Investments—Trading, $75,000.

74.Kendall Corp. purchased at par value $160,000 of Barker Company’s 7% bonds that mature in 10 months. The bonds pay interest semiannually on June 1 and December 1. Kendall plans to hold the bonds until they mature. The journal entry to record Kendall’s purchase of the bonds is:   

A.debit Short-Term Investments—HTM $160,000; credit Cash, $160,000.

B.debit Cash, $169,333; credit, Short-Term Investments—HTM $169,333.

C.debit Cash, $160,000; credit Short-Term Investments—HTM $160,000.

D.debit Long-Term Investments-HTM $160,000; credit Cash $160,000.

E.debit Cash, $160,000; credit Long-Term Investments-HTM $160,000.

75.Barnes Company holds $50,000 of 8% bonds that mature in six years as a held-to-maturity security. Which of the following is the correct journal entry to record the receipt of the semiannual interest payment?   

A.debit Cash, $4,000; credit Long-Term Investments—HTM, $4,000.

B.debt Cash, $2,000; credit Long-Term Investments—HTM, $2000.

C.debit Cash, $2,000; credit Interest Revenue, $2,000.

D.debit Unrealized Gain-Equity, $2,000; credit Cash, $2,000.

E.debit Cash, $4,000; credit Unrealized Gain-Equity, $4,000.

76.Accounting for long-term investments in equity securities with controlling influence uses the:   

A.Controlling method.

B.Equity method with consolidation.

C.Investor method.

D.Investment method.

E.Consolidated method.

77.The controlling investor is called the:   

A.Owner.

B.Subsidiary.

C.Parent.

D.Investee.

E.Senior entity.

78.The investee company in a long term investment with controlling interest is called the:   

A.Owner.

B.Subsidiary.

C.Parent.

D.Creditor.

E.Senior entity.