Sutcliff Company acquires 100 Trout Inc. 10%, semiannual, 20-year, $1,000 bonds on January 1, 2020, for...

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Sutcliff Company acquires 100 Trout Inc. 10%, semiannual, 20-year, $1,000 bonds on January 1, 2020, for $106,000, plus brokerage fees of $2.000. Sutcliff receives net proceeds of $103,000 on the sale of the Trout Inc. bonds on January 1, 2021, after receiving the interest due. The entry to record the sale would include O acredit to Gainon Sale of Debt Investments of $5,000. a debit to Loss on Sale of Debt Investments of $3000. Oa credit to Gain on Sale of Debt Investments of $3,000. O a debit to Loss on Şale of Debt Investments of $5,000. Sutcliff Company acquires 100 Trout Inc. 10%, semiannual, 20-year, $1,000 bonds on January 1, 2020, for $106,000, plus brokerage fees of $2.000. Sutcliff receives net proceeds of $103,000 on the sale of the Trout Inc. bonds on January 1, 2021, after receiving the interest due. The entry to record the sale would include O acredit to Gainon Sale of Debt Investments of $5,000. a debit to Loss on Sale of Debt Investments of $3000. Oa credit to Gain on Sale of Debt Investments of $3,000. O a debit to Loss on Şale of Debt Investments of $5,000.

Answer rating: 100% (QA)

At acquisition of debt investments the cost principle applies Cost includes all exp... View the full answer