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.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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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.                                                                                                          

                                                                                                     
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