Entries for bond (held-to-maturity) investments Gillooly Co. purchased $24,000 of 8%, 12-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 $6,000 of the Lumpkin County bonds at 102 plus $40 accrued interest less a $135 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 Cour✔ 24,000 ✓ 213 ✔ Interest Receivi✔ Cash ✔ Feedback Check My Work b. Semiannual interest on October 1. Year 1 Oct. 1 Cash ✔ Interest Receiva ✔ Interest Reverw Feedback Check My Work c. Sale of the bonds on October 31. Year 1 Oct. 31 Cash ✔ 960 Loss on Sale of Invest ✔ Interest Rever✔ Investments-Lumpkin Cour ▾ ✓ Feedback Check My Work 24,213 ✓ 40 ✓ 6,000 ✓ d. Adjusting entry for accrued interest on December 31, Year 1. Year 1 Dec. 31 Interest Receivi✔ 86 Interest Rever▾ ✔

Entries for bond (held-to-maturity) investments Gillooly Co. purchased $24,000 of 8%, 12-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 $6,000 of the Lumpkin County bonds at 102 plus $40 accrued interest less a $135 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 Cour✔ 24,000 ✓ 213 ✔ Interest Receivi✔ Cash ✔ Feedback Check My Work b. Semiannual interest on October 1. Year 1 Oct. 1 Cash ✔ Interest Receiva ✔ Interest Reverw Feedback Check My Work c. Sale of the bonds on October 31. Year 1 Oct. 31 Cash ✔ 960 Loss on Sale of Invest ✔ Interest Rever✔ Investments-Lumpkin Cour ▾ ✓ Feedback Check My Work 24,213 ✓ 40 ✓ 6,000 ✓ d. Adjusting entry for accrued interest on December 31, Year 1. Year 1 Dec. 31 Interest Receivi✔ 86 Interest Rever▾ ✔

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 (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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