The following bond investment transactions were completed during a recent year by Starks Company: Year 1     Jan. 31 Purchased 75, $1,000 government bonds at 100 plus accrued interest of $313 (one month). The bonds pay 5% annual interest on July 1 and January 1. July 1 Received semiannual interest on bond investment. Aug. 30 Sold 33, $1,000 bonds at 95 plus $275 accrued interest (two months).   Required: a. Journalize the entries for these transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. b. Provide the December 31, Year 1, adjusting journal entry for semiannual interest earned on the bonds

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The following bond investment transactions were completed during a recent year by Starks Company:
Year 1    
Jan. 31 Purchased 75, $1,000 government bonds at 100 plus accrued interest of $313 (one month). The bonds pay 5% annual interest on July 1 and January 1.
July 1 Received semiannual interest on bond investment.
Aug. 30 Sold 33, $1,000 bonds at 95 plus $275 accrued interest (two months).
 
Required:
a. Journalize the entries for these transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year.
b. Provide the December 31, Year 1, adjusting journal entry for semiannual interest earned on the bonds.
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