Question

Do Journal entry for acquiring a bond: Kuhl Corporation acquires 50 Doan Inc, 8%, 10 year $1000 bonds on 1/1/2017 for $50,000 What is the journal entry: Recording the bond interest: Do The bonds pay interest of $4000 annually on January 1 ($50,000 x 8%). If Kuhl Corp's fiscal year ends on December 31, what is the adjusting entry? What is the journal entry to record the receipt of the interest? Sale of the bond: Kuhl Corporation receives net proceeds of $54,000 on January 1 from the sale of the bond: Do Know Stock investments are investments in the capital stock of other corporations. Investors Ownership:

Answer 1

Solution 1:

Journal Entries - Kuhl Corporation
Date	Particulars	Debit	Credit
1-Jan	Bond investment Dr	$50,000.00
	To Cash		$50,000.00
	(To record investment in bond)

Solution 2:

Journal Entries - Kuhl Corporation
Date	Particulars	Debit	Credit
31-Dec	Interest receivables Dr	$4,000.00
	To Interest revenue		$4,000.00
	(To record interest accrued)

Solution 3:

Journal Entries - Kuhl Corporation
Date	Particulars	Debit	Credit
1-Jan	Cash Dr	$54,000.00
	To Interest receivables		$4,000.00
	To Bond investment		$50,000.00
	(To record proceed from sale of bonds)

Solution 4:

Journal Entries - Sanchez Corporation
Date	Particulars	Debit	Credit
1-Jan	Equity investment Dr	$40,000.00
	To Cash		$40,000.00
	(To record investment in common stock)