Question: entries for investment in bonds interest and sale of bonds...
Entries for Investment in Bonds, Interest, and Sale of Bonds
Bocelli Co. purchased $90,000 of 8%, 15-year Sanz County bonds on May 11, Year 1, directly from the county, at their face amount plus accrued interest. The bonds pay semiannual interest on April 1 and October 1. On October 31, Year 1, Bocelli Co. sold $30,000 of the Sanz County bonds at 101 plus $200 accrued interest less a $340 brokerage commission.
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. Assume a 360-day year.
a. Provide the journal entry for the purchase of the bonds on May 11 plus 72 days of accrued interest.
|Year 1 May 11||Investments-Sanz County Bonds|
b. Provide the journal entry for the semiannual interest on October 1.
|Year 1 Oct. 1||Cash|
c. Provide the journal entry for the sale of the bonds on October 31.
|Year 1 Oct. 31||Cash|
|Loss on Sale of Investments|
|Gain on Sale of Investments|
d. Provide the adjusting entry for accrued interest of $800 on December 31, Year 1.
|Year 1 Dec. 31||Interest Receivable|