MESSAGE MY INSTRUCTOR FULL SCREEN | PRINTER VERSION BACK NEX Problem H-1 Penn Fa

Question

MESSAGE MY INSTRUCTOR FULL SCREEN | PRINTER VERSION BACK NEX Problem H-1 Penn Farms is a grower of hybrid seed corn for Bend Genetics Corporation. It has had two exceptionally good years and has elected to invest its excess funds in bonds. The following selected transactions relate to bonds acquired as an investment by Penn Farms, whose fiscal year ends on December 31. 2017 { Jan. 1 Purchased at par $990,000 of Dover Corporation 10-year, 7% bonds dated January 1, 2017, directly from the issuing corporation July 1 Received the semiannual interest on the Dover bonds Dec. 31 Accrual of interest at year-end on the Dover bonds. Assume that all intervening transactions and adjustments have been properly recorded and the number of bonds owned has not changed from December 31, 2017, to December 31, 2019. 2020 an. 1 Received the semiannual interest on the Dover bonds Jan. 1 Sold $495,000 of Dover bonds at 105 Duly 1 Received the semiannual interest on the Dover bonds. Dec. 31 Accrual of interest at year-end on the Dover bonds. Journalize the listed transactions for the years 2017 and 2020. (Credit account tittes are automaticolly indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Trave eservatio.. Ith and IMG 5521 (2) ing bags (154 unread) -sallyelya

Explanation / Answer

Journal Entries Date Account Title & Explanation Debit Credit Jan 1 2017 Investment in 7% bonds of Dover Corporation 990000 Cash 990000 (bonds purchased) July 1 2017 Cash 34650 Interest on bonds 34650 (Semi annual interest received on bonds @ 7%) Dec 31,2017 Interest accrued on bonds 34650 Interest on bonds 34650 (Semi annual interest accrued on bonds) Jan 1 2020 Cash 34650 Interest accrued on bonds 34650 (Interest accrued on bonds received) Jan 1 2020 Cash 519750 Investment in 7% bonds of Dover Corporation 495000 Profit on sale on bonds 24750 (part of bond investment sold at 105) July 1 2020 Cash 17325 Interest on bonds 17325 (Semi annual interest received on bonds @ 7%) Dec 31,2020 Interest accrued on bonds 17325 Interest on bonds 17325 (Semi annual interest accrued on bonds)

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