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FINANCIAL ACCOUNTING
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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Entries for bond (held-to-maturity) investments The following bond investment transactions were completed by Starks Company: Jan. 31 Purchased 51, $1,000 government bonds at 100 plus accrued interest of $255 (1 month). The bonds pay 6% annual interest on July 1 and January 1. Received semiannual interest on bond investment. Sold 21, $1,000 bonds at 97 plus $210 accrued interest (2 months). July 1 Aug. 30 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 July 1 Aug. 30 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 c. Journalize the receipt of $30,000 at the bonds' maturity on July 1. If an amount box does not require an entry, leave it blank. July. 1
Transcribed Image Text:Entries for bond (held-to-maturity) investments The following bond investment transactions were completed by Starks Company: Jan. 31 Purchased 51, $1,000 government bonds at 100 plus accrued interest of $255 (1 month). The bonds pay 6% annual interest on July 1 and January 1. Received semiannual interest on bond investment. Sold 21, $1,000 bonds at 97 plus $210 accrued interest (2 months). July 1 Aug. 30 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 July 1 Aug. 30 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 c. Journalize the receipt of $30,000 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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