Hans Company purchased bonds of Zimmer Corporation. Hans Company expects to hold the Zimmer Corporation bonds for more than one year. On its classified balance sheet, Hans Company should report the Zimmer Corporation bonds as1. a current asset. 2. an intangible asset. 3. stockholders' equity. 4. property, plant, and equipment. 5. a long-term investment.

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Business

Annabelle Joseph

21 November, 10:59

Hans Company purchased bonds of Zimmer Corporation. Hans Company expects to hold the Zimmer Corporation bonds for more than one year. On its classified balance sheet, Hans Company should report the Zimmer Corporation bonds as1. a current asset. 2. an intangible asset. 3. stockholders' equity. 4. property, plant, and equipment. 5. a long-term investment.

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Shania Osborn · Answer 1

5. a long-term investment.

Explanation:

A long-term investment is the accounts that are recorded on the asset of the balance sheet of an organization. Long-term investment are investments of the organisation which comprises of real estate, stocks, cash, and bonds which the company has the intention of keeping it for more than one year.

A long-term investment is different from a short term investment because the company can decide to sell it within a period less than one year.

A long term investment is more risky than the short term investment, because the long term investment has the potential give the holders higher rewards because of their willingness exercise patience and allow their capital to be tied up for a period of time that is longer.

Since Hans Company expects to hold the Zimmer Corporation bonds for more than one year, it is therefore a long-term investment.

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