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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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