Exercise 12-2 (Part Level Submission) Jenek Corporation had the following transa

Question

Exercise 12-2 (Part Level Submission) Jenek Corporation had the following transactions pertaining to debt investments. Jan. 1 Purchased 40 8%, $1,100 Leeds Co. bonds for $44,000 cash. Interest is payable semiannually on July 1 and January 1. July 1 Received semiannual interest on Leeds Co. bonds July 1 Sold 24 Leeds Co. bonds for $29,920. (a) Your answer is partially correct. Try again. Journalize the transactions. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No entry" fo for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1Debt Investments 44,000 Cash 44,000 July 1Interest Receivable 1760 Interest Revenue 1760 (To record interest received) 1 July 1 Cash 29920

Explanation / Answer

Solution:

In the books of Jenek Corporation

journal

Working notes:

1. Interest Revenue = 44000*8%*6/12= $1,760

2. Part of Debt Investments sold = 44000*24/40= $26,400

3. Gain on sale of debt investments= 29920-26400 = $3,520

Date Particulars Amount($) Debit Amount($) Credit jan, 1 Debt Investments A/C 44,000 Cash A/C 44,000 July, 1 Cash A/C 1,760 Interest Revenue A/C 1,760 July, 1 Cash A/C 29,920 Gain on sale of debt investments A/C 3,520 Debt Investments A/C 26,400

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.