InstructionsChart of AccountsOn February 1, 2020, Aggie Corporation sold its investment in Smith Corporation bonds for $12,500. The bonds have a faceCHART OF ACCOUNTSvalue of $12,000 and a stated interest rate of 10%. The market value of the bonds on December 31, 2019 was $12,300.Aggie CorporationRequired:General LedgerPrepare the journal entries to record the sale of the bonds and the adjustments of the unrealized gain or loss.ASSETSREVENUE111 Cash411 Sales Revenue113 Investment in Trading Securities431 Interest Income114 Investment in Available-for-Sale Securities441 Gain on Sale of Available-for-SaleGeneral Journal117 Interest ReceivableSecurities119 Allowance for Change in Fair Value of Investment121 Accounts ReceivableEXPENSESPrepare the journal entries to record the sale of the bonds and the adjustments of the unrealized gain or loss on February 1, 2020.500 Cost of Goods Sold141 Inventory152 Prepaid Insurance511 Insurance ExpenseGeneral Journal Instructions181 Equipment512 Utilities Expense189 Accumulated Depreciation521 Salaries Expense191 Investment in Held-to-Maturity Debt Securities532 Bad Debt ExpensePAGE 1540 Interest ExpenseGENERAL JOURNALLIABILITIES541 Depreciation ExpenseDATEACCOUNT TITLEPOST. REF.DEBITCREDIT211 Accounts Payable559 Miscellaneous ExpensesFeb. 1Cash12,500.00231 Salaries Payable910 Income Tax ExpenseAccounts Payable12,500.002250 Unearned RevenueGain on Sale of Available-for-Sale Securities200.00261 Income Taxes PayableFeb. 1 Unrealized Holding Gain/Loss: Available-for-Sale Securities300.0045300.00EQUITY311 Common Stock331 Retained Earnings339 Unrealized Holding Gain/Loss: Available-for-SaleSecurities

Instructions On February 1, 2020, Aggie Corporation sold its investment in Smith Corporation bonds for $12,500. The bonds have a face value of $12.000 and a stated interest rate of 10%. The market value of the bonds on December 31, 2019 was $12.300. Required: Prepare the journal entries to record the sale of the bonds and the adjustments of the unrealized gain or loss.

Instructions On February 1, 2020, Aggie Corporation sold its investment in Smith Corporation bonds for $12,500. The bonds have a face value of $12.000 and a stated interest rate of 10%. The market value of the bonds on December 31, 2019 was $12.300. Required: Prepare the journal entries to record the sale of the bonds and the adjustments of the unrealized gain or loss.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 71E

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