Gillooly Co. purchased $135,000 of 6%, 20-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 $28,800 of the Lumpkin County bonds at 96 plus $144 accrued interest less a $85 brokerage commission. Required: Journalize the entries to record the following: a. The purchase of the bonds on May 11 plus 40 days of accrued interest.* b. Semiannual interest on October 1.* c. Sale of the bonds on October 31.* d. Adjusting entry for accrued interest on December 31, Year 1.* e. The receipt of the face value of the remaining bonds at their maturity on April 1, Year 20.* *Refer to the chart of accounts for the exact wording of the acco 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. Assume a 360-day year. Do not round your intermediate calculations and round final answers to the nearest dollar.
Gillooly Co. purchased $135,000 of 6%, 20-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 $28,800 of the Lumpkin County bonds at 96 plus $144 accrued interest less a $85 brokerage commission. Required: Journalize the entries to record the following: a. The purchase of the bonds on May 11 plus 40 days of accrued interest.* b. Semiannual interest on October 1.* c. Sale of the bonds on October 31.* d. Adjusting entry for accrued interest on December 31, Year 1.* e. The receipt of the face value of the remaining bonds at their maturity on April 1, Year 20.* *Refer to the chart of accounts for the exact wording of the acco 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. Assume a 360-day year. Do not round your intermediate calculations and round final answers to the nearest dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Gillooly Co. purchased $135,000 of 6%, 20-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 $28,800 of the Lumpkin
County bonds at 96 plus $144 accrued interest less a $85 brokerage commission.
Required:
Journalize the entries to record the following:
a. The purchase of the bonds on May 11 plus 40 days of accrued interest."
b. Semiannual interest on October 1.*
c. Sale of the bonds on October 31.*
d. Adjusting entry for accrued interest on December 31, Year 1.*
e. The receipt of the face value of the remaining bonds at their maturity on April 1, Year 20.*
*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. Assume a 360-day year. Do not round your intermediate calculations and round final
answers to the nearest dollar.
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