Page 1 1. EX.15-01.ALGO (Algorithmic) Entries for Investment in Bonds, Interes G
ID: 2520044 • Letter: P
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Page 1 1. EX.15-01.ALGO (Algorithmic) Entries for Investment in Bonds, Interes Gonzalez Company acquired $ paid semiannually on May 1 and November 1. bonds for 97 Co., 6% bonds on May 1 at their face amount. Interest aycompany sold $55 ker On November 1, alez Company sold $55,200 of the Journalize entries to record the following in Year 1: For a compound transaction, if an amount box does not require an entry, leave it blank. a. The initial acquisition of the bonds on May 1. May 1 b. The semiannual interest received on November 1. Nov. 1 c. The sale of the bonds on November 1. Nov. 1 d. The accrual of $828 interest on Dec. 31 2. EX15-0 HEET.ALGO (Algorithmic)Explanation / Answer
Note : $828 is 6%interest accrued for 6 months on bonds remaining after sale
So, investments remaining= $828*2/6%=$27600
Cost of investments sold=$138000-$27600=$110400
Sale amount=$55200
Thus loss on sale= $110400-$55200=$55200
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Date Particulars Dr. ($) Cr.($) A. 1 May 6% Bonds a/c dr. 138000 To bank 138000 B. 1 Nov Bank a/c dr. 4140 To interest revenue 4140 C. 1 Nov Bank a/c dr. 55200 Loss on sale 55200 To 6% bonds (See Note) 110400 31 Dec Interest receivable a/c dr. 828 To interest a/c 828Related Questions
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