Bond (held-to-maturity) investments The following bond investment transactions were completed by Starks Company: Jan. 31. Purchased $90,000 government bonds as a held-to-maturity investment at 100 plus accrued interest for 1 month. The bonds pay 7% annual interest on July 1 and January 1. July 1. Received semiannual interest on bond investment. Aug. 30. Sold $24,000 bonds at 99 plus accrued interest for 2 months. a. Journalize the entries for the preceding transactions. If an amount box does not require an entry, leave it blank. Jan. 31 Investments-Government Bonds July 1 Interest Receivable Cash Cash ✓ Interest Receivable Interest Revenue Aug. 30 Cash Loss on Sale of Investments Interest Revenue Investments-Government Bonds Dec. 31 Interest Receivable 90,000 Interest Revenue 6,300 X 96,300 X b. Journalize the December 31 adjusting entry for semiannual interest earned on the bonds. If an amount box does not require an entry, leave it blank. 6,300 X

Bond (held-to-maturity) investments The following bond investment transactions were completed by Starks Company: Jan. 31. Purchased $90,000 government bonds as a held-to-maturity investment at 100 plus accrued interest for 1 month. The bonds pay 7% annual interest on July 1 and January 1. July 1. Received semiannual interest on bond investment. Aug. 30. Sold $24,000 bonds at 99 plus accrued interest for 2 months. a. Journalize the entries for the preceding transactions. If an amount box does not require an entry, leave it blank. Jan. 31 Investments-Government Bonds July 1 Interest Receivable Cash Cash ✓ Interest Receivable Interest Revenue Aug. 30 Cash Loss on Sale of Investments Interest Revenue Investments-Government Bonds Dec. 31 Interest Receivable 90,000 Interest Revenue 6,300 X 96,300 X b. Journalize the December 31 adjusting entry for semiannual interest earned on the bonds. If an amount box does not require an entry, leave it blank. 6,300 X

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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Bond Discount, Entries for Bonds Payable Transactions On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $42,309,236. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. 20Y1 July 1 1. Accounts Payable Bonds Payable Cash Interest Expense Interest Payable Premium on Bonds Payable 2. Accounts Payable Bonds Payable Discount on Bonds Payable Interest Expense Interest Payable Premium on Bonds Payable 3. Bonds Payable Cash Discount on Bonds Payable Interest Expense Interest Payable Premium on Bonds Payable Journalize the entries to record the following: The first semiannual…
Bond (held-to-maturity) investments The following bond investment transactions were completed by Starks Company: Jan. 31. Purchased $90,000 government bonds as a held-to-maturity investment at 100 plus accrued interest for 1 month. The bonds pay 7% annual interest on July 1 and January 1. July 1. Received semiannual interest on bond investment. Aug. 30. Sold $24,000 bonds at 99 plus accrued interest for 2 months. a. Journalize the entries for the preceding transactions. If an amount box does not require an entry, leave it blank. Jan. 31 Investments-Government Bonds July 1 Interest Receivable Cash Cash Interest Receivable Interest Revenue Aug. 30 Cash Loss on Sale of Investments Interest Revenue Investments-Government Bonds 90,000 525 3,150 24,240 X 285 X 90,525 525 2,625 525 X 24,000
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$70,000 worth of 5 year bonds were issued on January 1st with a contract rate of 5% and market rate of 6%. Interest is paid semiannually. Calculate the amount of interest paid to bondholders on July 1st. $4.200 O 31,750 $3.500 O $2,100
Bond Premium, Entries for Bonds Payable Transactions Rodgers Corporation produces and sells football equipment. On July 1, 20Y1, Rodgers issued $77,800,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $87,495,638. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. fill in the blank 4ad6ca024fc305d_2 fill in the blank 4ad6ca024fc305d_3 fill in the blank 4ad6ca024fc305d_5 fill in the blank 4ad6ca024fc305d_6 fill in the blank 4ad6ca024fc305d_8 fill in the blank 4ad6ca024fc305d_9 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond…
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Apr.1Purchased for cash $372,000 of Vasquez City 3% bonds at 100 plus accrued interest of $2,790. June30Received first semiannual interest payment. July31Sold $139,200 of the bonds at 98 plus accrued interest of $348. Aug.1Received face value of remaining bonds at their maturity. Required: Journalize the entries to record the above selected bond investment transactions for Beacon Trust. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
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