Exercise 12-3 Date Account Titles and Explanation Debit Credit (To record receip
ID: 2526955 • Letter: E
Question
Exercise 12-3
Date
Account Titles and Explanation
Debit
Credit
(To record receipt of interest)
Jan. 1, 2018
(To record sale of bonds)
Exercise 12-3
Flynn Company purchased 85 Rinehart Company 5%, 10-year, $1,000 bonds on January 1, 2017, for $85,000. The bonds pay interest annually on January 1. On January 1, 2018, after receipt of interest, Flynn Company sold 48 of the bonds for $46,750.Prepare the journal entries to record the transactions described above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2017Dec. 31, 2017Jan. 1, 2018
Dec. 31, 2017Jan. 1, 2017Jan. 1, 2018
Jan. 1, 2017Dec. 31, 2017Jan. 1, 2018
(To record receipt of interest)
Jan. 1, 2018
(To record sale of bonds)
Explanation / Answer
Journal entry :
Date accounts & explanation debit credit Jan 1,2017 Bonds investment 85000 Cash 85000 (To record purchase of debt investment) Dec. 31, 2017 Interest receivable (85000*5%) 4250 Interest revenue 4250 (To record accured interest ) Jan 1,2018 Cash 4250 Interest receivable 4250 (To record receipt of interest) Jan 1,2018 Cash 46750 Loss on sale of bonds investment 1250 Bonds investment (48*1000) 48000 (To record sale of bonds)Related Questions
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