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Homework answers / question archive / Journalize the entries to record the following selected bond investment transactions for Jennings products: a

Journalize the entries to record the following selected bond investment transactions for Jennings products: a

Accounting

Journalize the entries to record the following selected bond investment transactions for Jennings products:
a. Purchased for cash $40,000 of Tech Grove, Inc. 6% bonds at 100 plus accrued interest of $850.
b. Received first semiannual interest.
c. Sold $15,000 of the bonds at 102 plus accrued interest of $150.
 

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a.     Investments x Tech Grove, Inc. Bonds........................... 40,000

        Interest Receivable............................................................... 850

               Cash....................................................................................             40,850

 

b.     Cash................................................................................. 1,200*

               Interest Receivable.............................................................                  850

               Interest Revenue.................................................................                  350

       

        *$40,000 × 6% × ½

 

c.      Cash............................................................................... 15,450*

               Interest Revenue.................................................................                  150

               Gain on Sale of Investments...............................................                  300

               Investments x Tech Grove, Inc. Bonds..............................             15,000

 

 

          *Sale proceeds ($15,000 × 102%)................................. $15,300

         Accrued interest.................................................................. 150

         Total proceeds from sale.............................................. $15,450

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