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Flynn Company purchased 70 Rinehart Company 10%, 10-year, $1,980 bonds on January 1, 2017, for $138,600. The bonds pay interest annually on January 1. On January 1, 2018, after receipt of interest, Flynn Company sold 40 of the bonds for $76,230.

Prepare the journal entries to record the transactions described above. (Round answers to 0 decimal places, e.g. 15,250. 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 0 for the amounts. Record journal entries in the order presented in the problem.)

Account Titles and Explanation Credit Date Debit (To record receipt of interest) Jan. 1, 2018 (To record sale of bonds)

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Answer #1
Date accounst tItle Dr Cr
Jan 1 2017 Investment in Bonds $138,600
Cash $138,600
(being bonds purchased)
31-Dec-17 Interest receivable 13860
Interest revenue (70*1980*10%) 13860
Jan 1 2017 Cash 13860
Interest receivable 13860
(being receipt of interest)
Jan 1 2017 Cash 76320
Loss on sale of securities (bal fig) 2880
Investment in Bonds (1980*40) 79200
Being investment sold recorded
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