On January 1, 2017, Dooley Company Purchases $80,000, 5% Bonds

Multiple Choice

On January 1, 2017, Dooley Company purchases $80,000, 5% bonds at a price of 86.4 and a maturity date of January 1, 2027. Dooley Company intends to hold the bonds until their maturity date. Interest is paid semiannually, on January 1 and July 1. Dooley Company has a calendar year end. The entry for the receipt of interest on July 1, 2017 is:

A) debit Cash for $2000 and credit Interest Revenue for $2000.
B) debit Cash for $4000 and credit Interest Revenue for $4000.
C) debit Investment in Bonds for $2000 and credit Interest Revenue for $2000.
D) debit Investment in Bonds for $4000 and credit Interest Revenue for $4000.