The following bond investment transactions were completed during a recent year by Starks Company: Year 1 Jan. 31 Purchased 75, $1,000 government bonds at 100 plus accrued interest of $313 (one month). The bonds pay 5% annual interest on July 1 and January 1. July 1 Received semiannual interest on bond investment. Aug. 30 Sold 33, $1,000 bonds at 95 plus $275 accrued interest (two months). Required: a. Journalize the entries for these transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. b. Provide the December 31, Year 1, adjusting journal entry for semiannual interest earned on the bonds
The following bond investment transactions were completed during a recent year by Starks Company: Year 1 Jan. 31 Purchased 75, $1,000 government bonds at 100 plus accrued interest of $313 (one month). The bonds pay 5% annual interest on July 1 and January 1. July 1 Received semiannual interest on bond investment. Aug. 30 Sold 33, $1,000 bonds at 95 plus $275 accrued interest (two months). Required: a. Journalize the entries for these transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. b. Provide the December 31, Year 1, adjusting journal entry for semiannual interest earned on the bonds
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 7MCQ
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The following bond investment transactions were completed during a recent year by Starks Company:
Year 1 | ||
Jan. | 31 | Purchased 75, $1,000 government bonds at 100 plus accrued interest of $313 (one month). The bonds pay 5% annual interest on July 1 and January 1. |
July | 1 | Received semiannual interest on bond investment. |
Aug. | 30 | Sold 33, $1,000 bonds at 95 plus $275 accrued interest (two months). |
Required:
a. | Journalize the entries for these transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. |
b. | Provide the December 31, Year 1, |
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