Feb. 1 Purchased 12% Atom Company bonds with a face value of $20,000 at par, plus...
| Feb. 1 | Purchased 12% Atom Company bonds with a face value of $20,000 at par, plus accrued interest. Interest on the bonds is payable February 28 and August 31 each year, and the bonds are due August 31, 2019. Also purchased 10% Bradford Company bonds with a face value of $12,000 at par, plus accrued interest. Interest on the bonds is payable March 31 and September 30, and the bonds are due September 30, 2022. These are the only bonds the company owns and all are classified as available-for-sale securities. 3 Journal Entries |
Homework Answers
| Debit | Credit | |
| 12% Bonds | 20000 | |
| Accrued interest (20000*12%*5/12) | 1000 | |
| Cash/Bank | 21000 | |
| 10% Bonds | 12000 | |
| Accrued interest (12000*10%*5/12) | 500 | |
| Cash/Bank | 12500 |
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