Question

Entries for Investment in Bonds, Interest, and Sale of Bonds Bocelli Co. purchased $120,000 of 6%, 20-year Sanz County bonds on May 11, Year 1, directly from the county, at their face amount plus accrued interest. The bonds pay semiannual interest on April 1 and October 1. On October 31, Year 1, Bocelli Co. sold $30,000 of the Sanz County bonds at 99 plus $150 accrued interest less a $100 brokerage commission. Do not round Interim calculations. Round final answers to nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. Assume a 360-day year. 2. Provide the journal entry for the purchase of the bonds on May 11 plus 40 days of accrued interest Tvestments and county Bonds 120.000 Interest Receivable de amount of bands interest rate 60 days = 360 days and the cash Record the investment at face debit). Interest receivable (det for paid for the sum of cash plus interest racolvable.

Answer 1

Journal entries. particulars AnsweY- |credit LA Debit Date ar Investment in sans counting bonds ak or $120,000 May- Iwterest receivable k $ 800 DY L$120.000x6% x 4/360] 1o Cash Being the purel ase f bond ou may plus 40 days f accrued iüterestt $120 800 et- Cash Ale L12000 x6% * b/12] To Inkrest Receivable $120,000 x 6%. x HO/360] TO Interest revenue ieing Semianual interest oncct-] క3600 DY $800 $2,800 bet-31 cash ale 30,000 x 99/00) #50-$1070 $29,75O Loss on sale 4 Investmeut $H00 $30.000 +4150-29,750] TO Investment in Sang counby TO Tulerest &even Keing sole & boud oncet-3i] $30,000 bouds $150