A Company Paid $37,800 Plus a Broker's Fee of $525

Multiple Choice

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 $38,325; credit Cash $38,325.
B) Debit Long-Term Investments-HTM $37,800; credit Cash $37,800.
C) Debit Long-Term Investments-HTM $37,800; debit Loss on Investment $525; credit Cash $38,325.
D) Debit Long-Term Investments-HTM $37,800; debit Investment Expense $525; credit Cash $38,325.
E) Debit Cash $40,000; credit Long-Term Investments-HTM $40,000.