a. The purchase of the bonds on May 11 plus 40 days of accrued interest. Year 1 May 11 Investments-Lumpkin County Bonds v 78,000 Interest Receivable v 606 X Cash v 78,606 X Feedback Check My Work b. Semiannual interest on October 1. Year 1 Oct. 1 Cash 2,730 V Interest Receivable 606 X Interest Revenue v 2,124 X 00
a. The purchase of the bonds on May 11 plus 40 days of accrued interest. Year 1 May 11 Investments-Lumpkin County Bonds v 78,000 Interest Receivable v 606 X Cash v 78,606 X Feedback Check My Work b. Semiannual interest on October 1. Year 1 Oct. 1 Cash 2,730 V Interest Receivable 606 X Interest Revenue v 2,124 X 00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
why are these wrong
Transcribed Image Text:Check My Work
c. Sale of the bonds on October 31.
Cash
Year 1 Oct. 31
30,140 V
Loss on Sale of Investments
35
Interest Revenue v
30,000 x
Investments-Lumpkin County Bonds v
175 X
Feedback
Check My Work
d. Adjusting entry for accrued interest on December 31, Year 1.
Interest Receivable
Year 1 Dec. 31
849
Interest Revenue
849
Feedback
Check My Work
Transcribed Image Text:Gillooly Co. purchased $78,000 of 7%, 10-year Lumpkin County bonds on May 11, Year 1, directly from the county, at their face amount plus
accrued interest. The bonds pay semiannual interest on April 1 and October 1. On October 31, Year 1, Gillooly Co. sold $30,000 of the Lumpkin
County bonds at 101 plus $175 accrued interest less a $335 brokerage commission.
Journalize the entries to record the following: Do not round interim calculations. Round final answers to nearest dollar. If an amount
box does not require an entry, leave it blank. Assume a 360-day year.
a. The purchase of the bonds on May 11 plus 40 days of accrued interest.
Year 1 May 11 Investments-Lumpkin County Bonds
78,000
Interest Receivable v
606 X
Cash
78,606 X
Feedback
Check My Work
b. Semiannual interest on October 1.
Cash
Year 1 Oct. 1
2,730
Interest Receivable
606 X
Interest Revenue
2,124 X
Feedback
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Journal is a place where accounting transactions are listed in the book keeping system before ledger accounts.
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