CUSTOM PKG FOR AC114
27th Edition
ISBN: 9781337781923
Author: WARREN
Publisher: CENGAGE L
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Chapter 15, Problem 15.1EX
To determine
Bond investment: Bond investments are debt securities which pay a fixed interest revenue to the investor.
Debit and credit rules:
- Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in
stockholders’ equity accounts. - Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.
To journalize: The bond investment transactions in the books of Company G
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Entries for Investment in Bonds, Interest, and Sale of Bonds
Gonzalez Company acquired $157,200 of Walker Co., 5% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $46,200 of the bonds for 95.
Journalize entries to record the following in Year 1:
For a compound transaction, if an amount box does not require an entry, leave it blank.
a. The initial acquisition of the bonds on May 1.
May 1
b. The semiannual interest received on November 1.
Nov. 1
c. The sale of the bonds on November 1.
Nov. 1
d. The accrual of $925 interest on December 31.
Dec. 31
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Entries for Investment in Bonds, Interest, and Sale of Bonds Gonzalez Company acquired $206,400 of Walker Co., 7% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $45,000 of the bonds for 96. Journalize entries to record the following in Year 1: For a compound transaction, if an amount box does not require an entry, leave it blank.
Entries for Investment in Bonds, Interest, and Sale of Bonds
Gonzalez Company acquired $160,800 of Walker Co., 4% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $48,000 of the bonds for 95.
Journalize entries to record the following in Year 1:
For a compound transaction, if an amount box does not require an entry, leave it blank. cash/interest receivable/interest revenue/intestments-walker co. bonds/notes receivable/gain on sale of investments/loss on sale of investments/
a. The initial acquisition of the bonds on May 1.
May 1
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b. The semiannual interest received on November 1.
Nov. 1
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fill in the blank 6a1691048043fc2_4
c. The sale of the bonds on November 1.
Nov. 1
fill in the blank ef2f17f46f98feb_2
fill in the blank…
Chapter 15 Solutions
CUSTOM PKG FOR AC114
Ch. 15 - Why might a business invest cash in temporary...Ch. 15 - What causes a gain or loss on the sale of a bond...Ch. 15 - When is the equity method the appropriate...Ch. 15 - How does the accounting for a dividend received...Ch. 15 - Prob. 5DQCh. 15 - What is the major difference in the accounting for...Ch. 15 - Prob. 7DQCh. 15 - How would a debit balance in Unrealized Gain...Ch. 15 - What are the factors contributing to the trend...Ch. 15 - Prob. 10DQ
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- Entries for Investment in Bonds, Interest, and Sale of Bonds Parilo Company acquired $204,000 of Makofske Company, 6% bonds on May 1, 20Y5, at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, 20Y5, Parilo sold $44,400 of the bonds for 96. Journalize the entries to record the following under the cost method: If an amount box does not require an entry, leave it blank. Questions are attached with image Needing answers for questions: B C Darrow_forwardEntries for investment in bonds, interest and sale of bondsThe following bond investment transactions were completed during arecent year by Starks Company: a. Journalize the entries for these transactions.b. Provide the December 31, Year 1, adjusting journal entry forsemiannual interest earned on the bonds.arrow_forwardInstructions Gonzalez Company acquired $180,000 of Walker Co., 6% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $55,800 of the bonds for 99. Journalize entries to record the following in Year 1 (refer to the Chart of Accounts for exact wording of account titles): a b. C. d. The initial quisition of the bonds on May 1. The semiannual interest received on November 1. The sale of the bonds on November 1. The accrual of $1,242 interest on December 31.arrow_forward
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