Entries for bond (held-to-maturity) investments The following bond investment transactions were completed by Starks Company: Jan. 31 Purchased 39, $1,000 government bonds at 100 plus accrued interest of $195 (1 month). The bonds pay 6% annual interest on July 1 and January 1. July 1 Received semiannual interest on bond investment. Aug. 30 Sold 15, $1,000 bonds at 97 plus $150 accrued interest (2 months). a. Journalize the entries for these transactions. Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar. If an amount box does not require an entry, leave it blank. Jan. 31 Investments-Government Bonds Interest Receivable Cash July 1 Cash Interest Receivable Interest Revenue Aug. 30 Cash Sale of Investments Interest Revenue InvestmentsInvestments-Government Bonds b. Journalize the December 31 adjusting entry for semiannual interest earned on the bonds. Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar. If an amount box does not require an entry, leave it blank. Dec. 31 Interest Receivable Interest Revenue c. Journalize the receipt of $24,000 at the bonds’ maturity on July 1. If an amount box does not require an entry, leave it blank. July. 1 Cash Investments-Government Bonds.
Entries for bond (held-to-maturity) investments
The following bond investment transactions were completed by Starks Company:
Jan. 31 | Purchased 39, $1,000 government bonds at 100 plus accrued interest of $195 (1 month). The bonds pay 6% annual interest on July 1 and January 1. |
July 1 | Received semiannual interest on bond investment. |
Aug. 30 | Sold 15, $1,000 bonds at 97 plus $150 accrued interest (2 months). |
a.
Jan. 31 |
Investments-Government Bonds |
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Interest Receivable |
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Cash |
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July 1 |
Cash |
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Interest Receivable |
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Interest Revenue |
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Aug. 30 |
Cash |
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Sale of Investments |
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Interest Revenue |
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InvestmentsInvestments-Government Bonds |
b. Journalize the December 31
Dec. 31 |
Interest Receivable |
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Interest Revenue |
c. Journalize the receipt of $24,000 at the bonds’ maturity on July 1. If an amount box does not require an entry, leave it blank.
July. 1 |
Cash |
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Investments-Government Bonds. |
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