Question 1 Prepare the journal entry to record the receipt of interest on July 1 Question 2 Prepare any required adjusting journal entry at October 31 On January 1, 2024, Crane Ltd., a public company, purchased $594,000 of 5-year, 6% bonds at par from Pronghorn Corporation.Interest is received semi-annually on July 1 and January 1. Crane purchased the bonds to earn interest. At December 31, 2024, thebonds were trading at 104.(a) Novak Corporation, during the year ended October 31, 2024, had the following transactions for money-market instrumentspurchased to earn interest:Jan.2 Purchased a 110-day, $38,800 treasury bill maturing on May 1 for $38,567.MayAug. 1Aug. 31Sept. 301Oct. 1Oct. 15The treasury bill matured.Invested $63,100 in a money-maret fund.Received notification that $158 of interest had been earned and added to the fund.Received notification that $158 of interest had been earned and added to the fund.Purchased a 90-day, 3.10%, $29,100 treasury bill for $28,876.Cashed the money-market fund and received $63,495.

Investment in treasury bills is a short-term investment made for the purpose of utilizing idle cash.…

Answered: Question 1 Prepare the journal entry to…

Question 1 Prepare the journal entry to record the receipt of interest on July 1 Question 2 Prepare any required adjusting journal entry at October 31

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1RE

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Question

Question 1 Prepare the journal entry to record the receipt of interest on July 1 Question 2 Prepare any required adjusting journal entry at October 31

On January 1, 2024, Crane Ltd., a public company, purchased $594,000 of 5-year, 6% bonds at par from Pronghorn Corporation.
Interest is received semi-annually on July 1 and January 1. Crane purchased the bonds to earn interest. At December 31, 2024, the
bonds were trading at 104.
(a)

Novak Corporation, during the year ended October 31, 2024, had the following transactions for money-market instruments
purchased to earn interest:
Jan.
2 Purchased a 110-day, $38,800 treasury bill maturing on May 1 for $38,567.
May
Aug. 1
Aug. 31
Sept. 30
1
Oct. 1
Oct. 15
The treasury bill matured.
Invested $63,100 in a money-maret fund.
Received notification that $158 of interest had been earned and added to the fund.
Received notification that $158 of interest had been earned and added to the fund.
Purchased a 90-day, 3.10%, $29,100 treasury bill for $28,876.
Cashed the money-market fund and received $63,495.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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