Lamar Corporation owns 60 percent of Humbolt Corporation’s voting shares. On Jan

Question

Lamar Corporation owns 60 percent of Humbolt Corporation’s voting shares. On January 1, 20X2, Lamar Corporation sold $240,000 par value, 6 percent first mortgage bonds to Humbolt for $248,000. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1.

A. Prepare the journal entries for 20X2 for Humbolt related to its ownership of Lamar’s bonds

1.Record the investment in the bonds of Lamar Corporation.

Investment oin lemar corporation bonds

Cash

2.Record the semiannual interest income received.

Cash

Interest Income

Investment in Lamar corporation bonds

3.Record the semiannual interest receivable.

Interest recievables

Interest Income

Investment in Lamar corporation Bonds

Please throughly show how you come up with the interest income and investment in lamar corporation bonds in part two. This is the part that I really dont get

Explanation / Answer

Lamar Corporation owns 60 percent of Humbolt Corporation’s voting shares. On Jan

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