b. Journalize the December 31 adjusting entry for semiannual interest earned on the bonds. Assume a 360-day year. Do not round interim calculations. Round final answers to nearestdollar. If an amount box does not require an entry, leave it blank.Dec. 31 Interest Receivable✓Interest RevenueFeedback✓ Check My Workb. Remember to accrue the interest only on the remaining bonds after the sale. Use the same formula as in part a adjusted for the appropriate time period.c. Journalize the receipt of $15,000 at the bonds' maturity on July 1. If an amount box does not require an entry, leave it blank.July. 1Feedback✓ Check My WorkIncorrect >Entries for bond (held-to-maturity) investmentsThe following bond investment transactions were completed by Starks Company:Jan. 31Purchased 24, $1,000 government bonds at 100 plus accrued interest of $120 (1 month). The bonds pay 6% annual interest onJuly 1 and January 1.Received semiannual interest on bond investment.Sold 9, $1,000 bonds at 98 plus $90 accrued interest (2 months).July 1Aug. 30a. Journalize the entries for these transactions. Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar. If an amount box does not require anentry, leave it blank.Jan. 31 Investments-Government BondsInterest Receivable ✓✓Cash✓July 1Cash✓Interest ReceivableInterest RevenueAug. 30 CashLoss on Sale of InvestmentsInterest Revenue✓000 000 000100 000 00024,0008,91024,100 X

Lets understand the basics. Journal entry is required to make to record event and tranasction in…

b. Journalize the December 31 adjusting entry for semiannual interest earned on the bonds. Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar. If an amount box does not require an entry, leave it blank. ✓ Dec. 31 Interest Receivable Interest Revenue Feedback Check My Work b. Remember to accrue the interest only on the remaining bonds after the sale. Use the same formula as in part a adjusted for the appropriate time period. c. Journalize the receipt of $15,000 at the bonds' maturity on July 1. If an amount box does not require an entry, leave it blank. July. 1 Feedback Check My Work Incer of

b. Journalize the December 31 adjusting entry for semiannual interest earned on the bonds. Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar. If an amount box does not require an entry, leave it blank. ✓ Dec. 31 Interest Receivable Interest Revenue Feedback Check My Work b. Remember to accrue the interest only on the remaining bonds after the sale. Use the same formula as in part a adjusted for the appropriate time period. c. Journalize the receipt of $15,000 at the bonds' maturity on July 1. If an amount box does not require an entry, leave it blank. July. 1 Feedback Check My Work Incer of

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $26,500,000 of five-year, 12% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 13%, resulting in Chin receiving cash of $25,547,585. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. 1. 2. 3. 300 000 000 000 000 b. Determine the amount of the bond interest expense for the first year.
What account would be debited (1), what account would be credit (2), and what amount would be paid to record the journal entry for each interest payment based on a $200,000 five-year, 10% bond and the bond was issued at $192,462 (11%) and interest is paid semiannually? JOURNAL Page 25 DATE DESCRIPTION P.REF. DEBIT CREDIT (1) ? (2) ? (1) Interest Expense debit $11,000, and (2) Cash credit $11,000 (1) Interest Expense debit $10,000 and (2) Cash credit $10,000 (1) Cash debit $20,000 and (2) Interest Expense credit $20,000 (1) Cash debit $22,000, and (2) Interest Expense credit $22,000
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