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b. Journalize the December 31 adjusting entry for semiannual interest earned on the bonds. Assume a 360-day year. Do not ro 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 c. Journalize the receipt of $33,000 at the bonds' maturity on July 1. If an amount box does not require an entry, leave it blank July. 1

b. Journalize the December 31 adjusting entry for semiannual interest earned on the bonds. Assume a 360-day year. Do not ro 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 c. Journalize the receipt of $33,000 at the bonds' maturity on July 1. If an amount box does not require an entry, leave it blank July. 1

FINANCIAL ACCOUNTING
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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The following bond investment transactions were completed by Starks Company: Jan. 31 July 1 Purchased 54, $1,000 government bonds at 100 plus accrued interest of $270 (1 month). The bonds pay 6% annual interest July 1 and January 1. Received semiannual interest on bond investment. Aug. 30 Sold 21, $1,000 bonds at 97 plus $210 accrued interest (2 months). a. 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 an entry, leave it blank. Jan. 31 Investments-Government Bonds Interest Receivable Cash July 1 Cash Interest Receivable Interest Revenue Aug. 30 Cash Loss on Sale of Investments Gain on Sale of Investments Investments-Government Bonds 54,000 270 54,270 270 1,350 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 c. Journalize the receipt of $33,000 at the bonds' maturity on July 1. If an amount box does not require an entry, leave it blank. July. 1
Transcribed Image Text:The following bond investment transactions were completed by Starks Company: Jan. 31 July 1 Purchased 54, $1,000 government bonds at 100 plus accrued interest of $270 (1 month). The bonds pay 6% annual interest July 1 and January 1. Received semiannual interest on bond investment. Aug. 30 Sold 21, $1,000 bonds at 97 plus $210 accrued interest (2 months). a. 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 an entry, leave it blank. Jan. 31 Investments-Government Bonds Interest Receivable Cash July 1 Cash Interest Receivable Interest Revenue Aug. 30 Cash Loss on Sale of Investments Gain on Sale of Investments Investments-Government Bonds 54,000 270 54,270 270 1,350 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 c. Journalize the receipt of $33,000 at the bonds' maturity on July 1. If an amount box does not require an entry, leave it blank. July. 1
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