Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Chapter 15, Problem 15.2EX
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 T Investments
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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
Check My Work
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.
ntries for Investment in Bonds, Interest, and Sale of Bonds
Gonzalez Company acquired $145,800 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 $55,800 of the bonds for 97.
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.
Chapter 15 Solutions
Accounting
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- How do I journalize the bonds?arrow_forwardEntries for Investments in Bonds, Interest, and Sale of Bonds Torres Investments acquired $239,200 of Murphy Corp., 5% bonds at their face amount on October 1, Year 1. The bonds pay interest on October 1 and April 1. On April 1, Year 2, Torres sold $115,600 of Murphy Corp. bonds at 104.arrow_forwardEntries 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_forward
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