Question

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.