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 T Investments

Question

Entries for investment in bonds, interest and sale of bondsGonzalez Company acquired $200,000 of Walker Co., 6% bonds on May 1at their face amount. Interest is paid semiannually on May 1 andNovember 1. On November 1, Gonzalez Company sold $70,000 of the bonds for 97.Journalize entries to record the following in Year 1:a. The initial acquisition of the bonds on May 1. b. The semiannual interest received on November 1.c. The sale of the bonds on November 1.d. The accrual of $1,300 interest on December 31.

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Chapter 15, Problem 15.2EX

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 T Investments

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Entries for investment in bonds, interest and sale of bondsGonzalez Company acquired $200,000 of Walker Co., 6% bonds on May 1at their face amount. Interest is paid semiannually on May 1 andNovember 1. On November 1, Gonzalez Company sold $70,000 of the bonds for 97.Journalize entries to record the following in Year 1:a. The initial acquisition of the bonds on May 1. b. The semiannual interest received on November 1.c. The sale of the bonds on November 1.d. The accrual of $1,300 interest on December 31.

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