Concept explainers
(a)
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 transaction for purchase of $200,000, 5% bonds of Company M at face value on May 1
(b)
To journalize: The bond investment transaction to record the semiannual interest revenue received on November 1
(c)
To journalize: The bond investment transaction $80,000 bonds of Company M sold at 98%, on November 1
(d)
To journalize: The bond investment transaction for accrued interest of $1,000 on December 31
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Chapter D Solutions
CORPORATE FINANCIAL ACCOUNTING 15TH ED
- general accounting questionarrow_forwardExpert of Account Solve this asaparrow_forwardFor Ikea Manufacturing, the predetermined overhead rate is 125% of direct labor cost. During the month, Ikea incurred $96,000 in total factory labor costs, of which $78,400 is direct labor and $17,600 is indirect labor. The actual manufacturing overhead incurred was $100,500. Compute the amount of manufacturing overhead applied during the month. Determine the amount of under- or overapplied manufacturing overhead.arrow_forward
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