use this list of accounts Problem 17-7 The following information relates to the
ID: 2537536 • Letter: U
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use this list of accounts
Problem 17-7 The following information relates to the debt securities investments of Culumber Company. 1. on February 1, the company purchased 12% bonds of Gibbons Co. having a per value of 302,400 at 100 plus accrued interest. Interest is payable April 1 and October 1. 2. On Apnl 1, semiannual interest is received 3. On July 1, 8% bonds of S mpson, Inc. were purchased. These bonds with a par value of $186,000 were purchased at 100 plus accrued interest. Interest dates are June 1 and December 1. . On September 1, bonds with a par value of $56,400, purchased on Fabruary 1, are sold at 99 plus accrued interest 5. On October 1, semiannual interest is received G. On December 1, semiannuel interest is received. 7. On December 31, the fair valuc of the bonds purchased February 1 and July 1 are 95 and 93, respectively. (a) Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale securities. (Credit account titles are automatically indented when amount is entered. Do mot indent manually. If no entry is required, select "No Entry" for the ccount titles and enter 0 for the amounts.) 31) and entor o Tor the No. Date Account Titles and Explanation (1) Feb. 1 (3) Jul. 1 (4) Sep. 1 To reccrd interest.) To record adjustment.)Explanation / Answer
Debt Invesment
Date Account Debit Credit 1 febDebt Invesment
302400 interest receivable [302400*.12*4/12] 12096 cash 314496 [Being investment made in debt securities.being interest paid for 4 month ] 1 apr cash 18144 Interest receivable 12096 Interest revenue [302400*.12*2/12] 6048 [being first semiannual interest received] 1 july Debt investment 186000 interest Receivable [186000*.08*1/12] 1240 cash 187240 [being interest accrued for 1 month 1 june -1 july paid along with purchase]Related Questions
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