Foren Corporation had the following transactions pertaining to debt investments. Jan 1: Purchased 50 8%, $1,000 Choate Co. bonds for $50,000 cash plus brokerage fees of $900. Interest is payable semiannually on July 1 and January 1. July 1: Received semiannual interest on Choate Co. bonds. July 1: Sold 30 Choate Co. bonds for $34,000 less $500 brokerage fees. a. Journalize the transactions. b. Prepare the adjusting entry for the accrual of interest at December 31.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Foren Corporation had the following transactions pertaining to debt investments.
Jan 1: Purchased 50 8%, $1,000 Choate Co. bonds for $50,000 cash plus brokerage fees of $900. Interest is payable semiannually on
July 1 and January 1.
July 1: Received semiannual interest on Choate Co. bonds.
July 1: Sold 30 Choate Co. bonds for $34,000 less $500 brokerage fees.
a. Journalize the transactions.
b. Prepare the adjusting entry for the accrual of interest at December 31.
Transcribed Image Text:Foren Corporation had the following transactions pertaining to debt investments. Jan 1: Purchased 50 8%, $1,000 Choate Co. bonds for $50,000 cash plus brokerage fees of $900. Interest is payable semiannually on July 1 and January 1. July 1: Received semiannual interest on Choate Co. bonds. July 1: Sold 30 Choate Co. bonds for $34,000 less $500 brokerage fees. a. Journalize the transactions. b. Prepare the adjusting entry for the accrual of interest at December 31.
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