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Exercise 16-2 Jenek Corporation had the following transactions pertaining to debt investments 1. Purchased 75 9%,$1,650 Leeds Co. bonds for $123,750 cash. Interest is payable annually on January 1, 2017. 2. Accrued interest on Leeds Co. bonds on December 31, 2017 3. Received interest on Leeds Co. bonds on January 1, 2018. 4 Sold 45 Leeds Co. bonds for $84,150 on January 1, 2018 ournalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. Round answers to 0 decimal places, e.g. 5,275

Answer 1

Solution: Journal Entries Date Jan.1,2017 Debt Investments Debit $ 1,23,750 No Account Titles and Explanation Credit Cash 1,23,750 (75 x $1,650 $123,750) Dec.31,2017 Interest Receivable $11,138 Interest Revenue 11,138 ($123,750 x 9%-$11,138) Jan.1,2018 Cash $ 11,138 Interest Receivable 11,138 Jan.1,2018 Cash 84,150 Debt Investments $74,250 (45 x $1,650 $74,250) Gain on Sale 9,900 ($84,150- $74,250)