The following bond investment transactions were completed during a recent year by Starks Company: Year 1 Jan. 31 Purchased 48, $1,000 government bonds at 100 plus accrued interest of $240 (one month). The bonds pay 6% annual interest on July 1 and January 1. July 1 Received semiannual interest on bond investment. Aug. 30 Sold 18, $1,000 bonds at 98 plus $180 accrued interest (two months). a. Journalize the entries for these transactions. Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. Year 1, Jan. 31 fill in the blank 4f12d20a5028024_2 fill in the blank 4f12d20a5028024_3 fill in the blank 4f12d20a5028024_5 fill in the blank 4f12d20a5028024_6 fill in the blank 4f12d20a5028024_8 fill in the blank 4f12d20a5028024_9 Year 1, July 1 fill in the blank 4f12d20a5028024_11 fill in the blank 4f12d20a5028024_12 fill in the blank 4f12d20a5028024_14 fill in the blank 4f12d20a5028024_15 fill in the blank 4f12d20a5028024_17 fill in the blank 4f12d20a5028024_18 Year 1, Aug. 30 fill in the blank 4f12d20a5028024_20 fill in the blank 4f12d20a5028024_21 fill in the blank 4f12d20a5028024_23 fill in the blank 4f12d20a5028024_24 fill in the blank 4f12d20a5028024_26 fill in the blank 4f12d20a5028024_27 fill in the blank 4f12d20a5028024_29 fill in the blank 4f12d20a5028024_30 b. Provide the December 31, Year 1, adjusting journal entry for semiannual interest earned on the bonds. Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar. Year 1, Dec. 31 fill in the blank eac0c2fc0017fa0_2 fill in the blank eac0c2fc0017fa0_4

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 Investment in Bonds, Interest, and Sale of Bonds

The following bond investment transactions were completed during a recent year by Starks Company:

Year 1
Jan. 31	Purchased 48, $1,000 government bonds at 100 plus accrued interest of $240 (one month). The bonds pay 6% annual interest on July 1 and January 1.
July 1	Received semiannual interest on bond investment.
Aug. 30	Sold 18, $1,000 bonds at 98 plus $180 accrued interest (two months).

a. Journalize the entries for these transactions.

Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank.

Year 1, Jan. 31	fill in the blank 4f12d20a5028024_2	fill in the blank 4f12d20a5028024_3
	fill in the blank 4f12d20a5028024_5	fill in the blank 4f12d20a5028024_6
	fill in the blank 4f12d20a5028024_8	fill in the blank 4f12d20a5028024_9
Year 1, July 1	fill in the blank 4f12d20a5028024_11	fill in the blank 4f12d20a5028024_12
	fill in the blank 4f12d20a5028024_14	fill in the blank 4f12d20a5028024_15
	fill in the blank 4f12d20a5028024_17	fill in the blank 4f12d20a5028024_18
Year 1, Aug. 30	fill in the blank 4f12d20a5028024_20	fill in the blank 4f12d20a5028024_21
	fill in the blank 4f12d20a5028024_23	fill in the blank 4f12d20a5028024_24
	fill in the blank 4f12d20a5028024_26	fill in the blank 4f12d20a5028024_27
	fill in the blank 4f12d20a5028024_29	fill in the blank 4f12d20a5028024_30

b. Provide the December 31, Year 1, adjusting journal entry for semiannual interest earned on the bonds.

Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar.

Year 1, Dec. 31		fill in the blank eac0c2fc0017fa0_2
			fill in the blank eac0c2fc0017fa0_4

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