Question

Whitmore Corporation had the following transactions pertaining to debt and stock investment transactions during calendar year 2020. Purchased 50, 10%, $1,000 Lawton Company bonds for $50,000. The bonds pay interest semi-annually on Jan 1 and July 1. Jan 1 Purchased 700 shares of Shaw Company stock for $9,415. Mar 1 Received semi-annual interest on the Lawton Company bonds. July 1 Sold 20 Lawton Company bonds for $19,000. July 1 Received cash dividends of $0.50 per share on the Shaw Company stock. July 15 Sold 400 shares of the Shaw Company stock for $5,900 Cash. Oct 10 Accrue the semi-annual interest on the Lawton Company bonds Dec 31 Shaw Company declared a $.50 per share dividend, payable Jan 15, 2021 Dec 31 Prepare journal entries for the above transactions Instructions

Answer 1

Journal Entries in the books of Whitmore Corporation

Date	Account Tittle	Debit	Credit
2020		$	$
Jan. 1	Investment in Bond	50,000
	Cash		50,000
	To record purchase of $50,000, 10% Bonds investment
Mar. 1	Stock Investment	9,415
	Cash		9,415
	To record investment in common stock of 700 shares
July 1	Cash	2,500
	Interest on Bonds		2,500
	To record semi annual interest of 10 % interest
July 1	Cash	19,000
	Loss on Sale	1,000
	Investment in Bonds		20,000
	To record sale of investment in bonds costing $20,000
July 15	Cash	350
	Dividend		350
	To Record receipt of $ 0.5 per share dividend on 700 stocks
Oct. 10	Cash	5,900
	Stock Investment		5,380
	Profit on Sale		520
	To record sale of 400 stock investment costing $5,380
Dec. 31	Interest Receivable	1,500
	Interest on Bonds		,500
	To record semiannual accrued interest on $30,000 Bonds
Dec. 31	Dividend Receivable	150
	Dividend		150
	To record accrued dividend of a $ 0.5 on 300 shares