15.3 #1 Entries for Investment in Bonds, Interest, and Sale of Bonds Gonzalez Co

Question

15.3

#1

Entries for Investment in Bonds, Interest, and Sale of Bonds

Gonzalez Company acquired $173,400 of Walker Co., 7% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $53,400 of the bonds for 97.

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.

e chegg Study G e Chegg Study | Gl e Tara Enterprises Cengage Course S CengageNOStart ? ? ? ? ? v2 cengagenow con intake ssignment takeAssignmen Main doi voker-assignments& takeAssignmentSessionLoca or-assignment t ? ? ? ? Ch 15-3 Exercises and Problems eBook Show Me How Calculator Print Item For a compound transaction, if an amount box does not require an entry, leave it blank. 1. EX.15-01 ALGO a. The initial acquisition of the bonds on May 1 2. EX.15-07.BLANKSHEET AL... 3. EX.15-10.BLANKSHEET.AL. 4. EX.15-11.ALGO 5. EX. 15-15.BLANKSHEET.AL..?. 6. EX.15-23.ALGO 7. EX.15-20.ALGO 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 $1,400 interest on December 31 Dec. 31 Check My Work 2 rore Check My Work uses remaining Next Progress: 1/7 items Assignment Score: 26.35% All work saved. Email Instructor Save and Exit Submit Assignment for Grading 4:06 AM Type here to search /282018 2

Explanation / Answer

Journal Entries are shown as follows (Amounts in $)

No. Date Account Titles Debit Credit a) May 1 Investments-Walker Co. 173,400 Cash 173,400 (To record initial acquisition of bonds) b) Nov. 1 Cash 6,069 Interest Revenue ($173,400*7%*6/12) 6,069 (To record the semiannual interest received) c) Nov. 1 Cash ($53,400*97%) 51,798 Loss on Sale of Investments ($53,400-$51,798) 1,602 Investments-Walker Co. 53,400 (To record the sale of investments of par value $53,400) d) Dec 31 Interest Receivable [($173,400-$53,400)*7%*2/12] 1,400 Interest Revenue 1,400 (To record the accrual of interest on balance investments)

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