Journalize the entries to record the following selected bond investment transact
ID: 2583116 • Letter: J
Question
Journalize the entries to record the following selected bond investment transactions for Hall Trusta. Purchase for cash $240,000 of Medina City 6% Bonds at 100 plus accrued interest of $3,600.
b. Received first semiannual interest payment.
c. Sold $120,000 of the bonds at 98 accrued interest of $600.
Journalize the entries to record the following selected bond investment transactions for Hall Trust
a. Purchase for cash $240,000 of Medina City 6% Bonds at 100 plus accrued interest of $3,600.
b. Received first semiannual interest payment.
c. Sold $120,000 of the bonds at 98 accrued interest of $600.
Explanation / Answer
a)
Dr Investments-Medina City Bonds $240,000
Dr Interest Receivable $3,600
Cr Cash $243,600
b)
Dr Cash $ 7,200
Cr Interest Receivable $3,600
Cr Interest revenue $3,600
Interest = $240,000 * 6% * 1/2 = $7,200
c)
Dr Cash $118,200
Dr Loss on Sale of Investments $2,400
Cr Intrest Revenue $600
Cr Investments-Medina City Bonds $120,000
*Sales Proceeds = $120,000 *98% = $117,600
+ Interest = $600
Cash Received = $118,200
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