Prepare Krum Co.’s journal entries to record the following transactions involving its short-term investments in available-for-sale debt securities, all of which occurred during the current year. a. On August 1, paid $50,000 cash to purchase Houtte’s 9%, six-month debt securities ($50,000 principal), dated August 1. b. On October 30, received a check from Houtte for 90 days’ interest on the debt securities in part a.

Question

Prepare Krum Co.’s journal entries to record the following transactions involving its short-term investments
in available-for-sale debt securities, all of which occurred during the current year.
a. On August 1, paid $50,000 cash to purchase Houtte’s 9%, six-month debt securities ($50,000 principal),
dated August 1.
b. On October 30, received a check from Houtte for 90 days’ interest on the debt securities in part a.

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