Question

On January 1, 2016. The Walder's Restaurant decides to invest in Lake Goodlock bonds. The bonde mature on December 31, 2024, and pay interest on June 30 and December 31 at 6% annually. The market rate of interest was ex on January 1, 2018, so the $70.000 maturity value bonds sold for the value Walden's intends to hold the bonds until December 31, 2024 Requirements 1. Joumalize the transactions related to Walden's investment in Lake Goodied bonds during 2018 2 In what category would Walder's report the investment on the December 31, 2018, balance sheet? Requirement 1. Jom the transactions related to Walden's Investment in Lake Goodlock bonds during 2018 Record debits first, the credits Select the explanation on the last line of the

Answer 1

Solution 1:

Journal Entries - Walden's restaurant
Date	Particulars	Debit	Credit
1-Jan-18	Investment in bond Dr	$70,000.00
	To Cash		$70,000.00
	(To record investment in bond)
30-Jun-18	Cash Dr	$2,100.00
	To Interest Revenue		$2,100.00
	(To record interest revenue)
31-Dec-18	Cash Dr	$2,100.00
	To Interest Revenue		$2,100.00
	(To record interest revenue)

Solution 2:

Walden would report the investment on Dec 31, 2018 balance sheet under category of "Investments"