Entries for bond (held-to-maturity) investments The following bond investment transactions were completed by Starks Company: Jan. 31 Purchased 75, $1,000 government bonds at 100 plus accrued interest of $375 (1 month). The bonds pay 6% annual interest on July 1 and January 1. July 1 Received semiannual interest on bond investment. Aug. 30 Sold 35, $1,000 bonds at 98 plus $350 accrued interest (2 months). a.  Journalize the entries for these transactions. Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar. If an amount box does not require an entry, leave it blank. Jan. 31 July 1 Aug. 30   b.  Journalize the December 31 adjusting entry for semiannual interest earned on the bonds. Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar. If an amount box does not require an entry, leave it blank. Dec. 31   c.  Journalize the receipt of $40,000 at the bonds’ maturity on July 1. If an amount box does not require an entry, leave it blank. July. 1

Selected debt investment transactions for Easy A Inc., a retail business, are listed below. Easy A Inc. has a fiscal year ending on December 31. Year 1: Feb. 1 May 1 Jun. 1 Sept. 1 Oct. 1 Dec. 1 Dec. 31 Year 2: Mar. 1 Jun. 1 Sept. 1 Bought $35,000 of 6%, XYZ Co. 12-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on June 1 and December 1. Bought $200,000 of Simple Tree 5%, 20-year bonds at their face amount plus accrued interest of $2,500. The bonds pay interest semiannually on March 1 and September 1. Received semiannual interest on the XYZ Co. bonds. Received semiannual interest on the Simple Tree bonds. Sold $15,000 of Simple Tree bonds at 102% plus accrued interest of $63. Received semiannual interest on the XYZ Co. bonds. Accrued $3,135 interest on the Simple Tree bonds. Accrued $175 interest on the XYZ Co. bonds. Received semiannual interest on the Simple Tree bonds. Received semiannual interest on the XYZ Co. bonds. Received…

Luke Corp. issued $2,000,000 of 20-year, 9% callable bonds on July 1, Year 1, with interest payable on June 30 and December 31. The fiscal year of the company is the calendar year. What is the entry to record the payment of interest on December 31 in the year the bonds were issued? a. Interest Expense Cash Ob. Interest Payable Interest Expense Cash Oc. Interest Expense Cash d. Cash Interest Expense 90,000 90,000 90,000 180,000 90,000 90,000 180,000 180,000 90,000

A company issued $1,000,000 of 30-year, 8% callable bonds on April 1, with interest payable on April 1 and October 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions: Year 1     Apr. 1   Issued the bonds for cash at their face amount. Oct. 1   Paid the interest on the bonds. Year 3     Oct. 1   Called the bond issue at 104, the rate provided in the bond indenture. (Omit entry for payment of interest.)   If an amount box does not require an entry, leave it blank. Year 1 Apr. 1   fill in the blank 2         fill in the blank 4 Year 1 Oct. 1   fill in the blank 6         fill in the blank 8 Year 3 Oct. 1   fill in the blank 10 fill in the blank 11     fill in the blank 13 fill in the blank 14

Bond Discount, Entries for Bonds Payable Transactions On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $3,300,000 of 5-year, 11% bonds at a market (effective) interest rate of 12%, receiving cash of $3,178,543. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1.  Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.   Cash  fill in the blank 82c4590b0fc5027_2 fill in the blank 82c4590b0fc5027_3   Discount on Bonds Payable  fill in the blank 82c4590b0fc5027_5 fill in the blank 82c4590b0fc5027_6   Bonds Payable  fill in the blank 82c4590b0fc5027_8 fill in the blank 82c4590b0fc5027_9 2.  Journalize the entries to record the following: a.  The first semiannual interest payment on December 31, 20Y1, and…

Issuing Bonds at Face Amount The first day of the fiscal year, a company issues a $350,000, 6%, 10-year bond that pays semiannual interest of $10,500 ($350,000 x 6% x 2 year), receiving cash of $350,000. a. Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the first interest payment. If an amount box does not require an entry, leave it blank. C. Journalize the entry to record the payment of the principal on the maturity date. If an amount box does not reguire an entry, leave it blank. 00 00

Issuing Bonds at Face Amount On January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $3,000,000, 8%, 10-year bond that pays semiannual interest of $120,000 ($3,000,000 x 8% x 2 year), receiving cash of $3,000,000. (a) Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank. Cash Bonds Payable (b) Journalize the entry to record the first interest payment on June 30. If an amount box does not require an entry, leave it blank. 88 Interest Expense Cash (c) Journalize the entry to record the payment of the principal on the maturity date. If an amount box does not require an entry, leave it blank. Bonds Payable Cash

Issuing Bonds at a Premium On the first day of the fiscal year, a company issues a $5,300,000, 8%, five-year bond that pays semiannual interest of $212,000 ($5,300,000 x 8% x ½), receiving cash of $5,520,390. Journalize the bond issuance. If an amount box does not require an entry, leave it blank. Previous Next Wodk Angieriment for Grading