Kendall Corp

Multiple Choice

Kendall Corp. purchased at par value $75,000 of Shrem Company's 8% bonds that mature in three-years. The bonds pay interest semiannually on June 1 and December 1. Kendall plans to hold the bonds until they mature. When the bonds mature, Kendall should prepare the following journal entry:

A) debit Unrealized Gain-Equity, $6,000; credit Cash, $6,000.
B) debit Cash, $75,000; credit Long-Term Investments-Trading, $75,000.
C) debit Long-Term Investments-HTM, $75,000; credit Cash, $75,000.
D) debit Cash, $75,000; credit Long-Term Investments-HTM, $75,000.
E) debit Cash, $6,000; credit, Unrealized Gain-Equity, $6,000.