When shares of stock held as an investment are sold the

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Reference no: EM13597037

1. Temporary investments
A) are reported as current assets
B) include cash equivalents
C) do not include equity securities
D) all of the above

2.On April 1, 2011, Albert Company purchased $50,000 of Tetter Company's 12% bonds at 100 plus accrued interest of $2,000. On June 30, 2011, Albert received its first semiannual interest. On February 1, 2011, Albert sold $40,000 of the bonds at 103 plus accrued interest. The journal entry Albert will record on April 1, 2011 for the purchase of the bonds will include:
A) a credit to Interest Payable for $2,000.
B) a debit to Investments - Tetter Company for $52,000.
C) a credit for Cash of $50,000.
D) a debit to Investments - Tetter Company for $50,000.

3.When shares of stock held as an investment are sold, the difference between the proceeds and the carrying amount of the investment is recorded as a(n)
A) prior period adjustment
B) extraordinary gain or loss
C) paid-in capital addition
D) gain or loss

Reference no: EM13597037

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