Chapter D, Problem D.2EX

Entries for investment in bonds, interest, and sale of bonds

Parilo Company acquired $170,000 of Makofske Co., 5% 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 $50,000 of the bonds for 96.

Journalize the entries to record the following:

A. The initial acquisition of the bends on May 1.

B. The semiannual interest received on November 1.

C. The sale of the bonds on November 1.

D. The accrual of $1,000 interest on December 31, 20YS.