Question

Entries for Investments in Bonds, Interest, and Sale of Bonds

Kalyagin Investments acquired $228,400 Jerris Corp., 9% bonds at their face amount on October 1, 20Y2. The bonds pay interest on October 1 and April 1. On April 1, 20Y3, Kalyagin sold $120,000 of Jerris bonds at 102.

Journalize the entries to record the following:

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.

Entries for Investments in Bonds, Interest, and Sale of Bonds Kalvagin Investments acquired $228,400 Jerris Corp., 996 bonds at their face amount on October 1, 20Y2. The bonds pay interest on October 1 and April 1, On April 1, 20V3, Kalyagin sold $120,000 of Jerris bonds at 102 Journalize the entries to record the following: 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 a. The initial acquisition of the Jerris Corp. bonds on October 1, 20Y2. 20Y2 Oct. 1 b. The adjusting entry for three months of accrued interest earned on the Jerris Corp. bonds on December 31, 20Y2. 20Y2 Dec. 31 c. The receipt of semiannual interest on April 1, 20Y3. 20Y3 Apr. 1

Answer 1

Answer:

Journal entries

Date	Particulars	Debit($)	Credit($)	Calculations
20Y2, Oct 1	Investment -bond A/c Dr	$228,400
	To Cash A/c		$228,400
20Y2, Dec 31	Receivable interest A/c Dr	$5,139		(228,400*9%) / 12*3
	To Interest Income A/c		$5,139
20Y3, Apr 1	Cash A/c Dr	$10,278		(228,400*9%) / 12*6
	To Interest Income A/c		$5,139
	To Receivable interest A/c		$5,139	(228,400*9%) / 12*3
20Y3, Apr 1	Cash A/c Dr	$122,400		(120,000 * 102%)
	To Investment -bond A/c		$120,000
	To Increase on sale of investment A/c		$2,400