Bond investment : Bond investments are debt securities which pay a fixed interest revenue to the investor. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. 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 Corporation B

Question

Want to see the full answer?

Answer 1

Question

Chapter 15, Problem 15.3EX

To determine

Bond investment: Bond investments are debt securities which pay a fixed interest revenue to the investor.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

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 Corporation B

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

eBook Show Me How Entries for investment in bonds, interest, and sale of bonds Instructions Chart of Accounts ! Journal Instructions × Bocelli Co. purchased $135,000 of 6%, 20-year Sanz County bonds on May 11, Year 1, directly from the county, at their face amount plus accrued interest. The bonds pay semiannual interest on April 1 and October 1. On October 31, Year 1, Bocelli Co. sold $28,800 of the Sanz County bonds at 96 plus $144 accrued interest less a $85 brokerage commission. Provide journal entries for the following (refer to the Chart of Accounts for exact wording of account titles). a. The purchase of the bonds on May 11 plus 40 days of accrued interest, assume a 360-day year. b. Semiannual interest on October 1. C. Sale of the bonds on October 31. d. Adjusting entry for accrued interest of $1,593 on December 31, Year 1.

Entries for Investment in Bonds, Interest, and Sale of Bonds Bocelli Co. purchased $84,000 of 7%, 12-year Sanz County bonds on May 11, Year 1, directly from the county, at their face amount plus accrued interest. The bonds pay semiannual interest on April 1 and October 1. On October 31, Year 1, Bocelli Co. sold $30,000 of the Sanz County bonds at 102 plus $175 accrued interest less a $665 brokerage commission. 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. Assume a 360-day year. a. Provide the journal entry for the purchase of the bonds on May 11 plus 72 days of accrued interest. Year 1 May 11 fill in the blank 2f0f5d043fb3074_2 fill in the blank 2f0f5d043fb3074_3 fill in the blank 2f0f5d043fb3074_5 fill in the blank 2f0f5d043fb3074_6 fill in the blank 2f0f5d043fb3074_8 fill in the blank 2f0f5d043fb3074_9 b. Provide the journal entry…

Entries for Investment in Bonds, Interest, and Sale of Bonds Bocelli Co. purchased $87,000 of 7%, 12-year Sanz County bonds on May 11, Year 1, directly from the county, at their face amount plus accrued interest. The bonds pay semiannual interest on April 1 and October 1. On October 31, Year 1, Bocelli Co. sold $36,000 of the Sanz County bonds at 101 plus $210 accrued interest less a $405 brokerage commission. 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. Assume a 360-day year.