Question

Bond Investment Transactions

Journalize the entries to record the following selected bond investment transactions for Starks Products:

For a compound transaction, if an amount box does not require an entry, leave it blank.

a. Purchased for cash $60,000 of Iceline, Inc. 6% bonds at 100 plus accrued interest of $600, paying interest semiannually.

		fill in the blank 35a355049030034_2	fill in the blank 35a355049030034_3
		fill in the blank 35a355049030034_5	fill in the blank 35a355049030034_6
		fill in the blank 35a355049030034_8	fill in the blank 35a355049030034_9

b. Received first semiannual interest payment.

		fill in the blank 2666ecfcefd0001_2	fill in the blank 2666ecfcefd0001_3
		fill in the blank 2666ecfcefd0001_5	fill in the blank 2666ecfcefd0001_6
		fill in the blank 2666ecfcefd0001_8	fill in the blank 2666ecfcefd0001_9

c. Sold $40,000 of the bonds at 102 plus accrued interest of $300.

		fill in the blank 0dc000ff2fab06b_2	fill in the blank 0dc000ff2fab06b_3
		fill in the blank 0dc000ff2fab06b_5	fill in the blank 0dc000ff2fab06b_6
		fill in the blank 0dc000ff2fab06b_8	fill in the blank 0dc000ff2fab06b_9
		fill in the blank 0dc000ff2fab06b_11	fill in the blank 0dc000ff2fab06b_12

Answer 1

a)

Particulars	Debit	Credit
Investments-Iceline, Inc. Bonds	$60,000
Interest Receivable	$600
Cash		$60,600

b)

Particulars	Debit	Credit
Cash(60,000*6%*1/2)	$1,800
Interest Receivable		$600
Interest Revenue		$1,200

c)

Particulars	Debit	Credit
Cash(40,000*102%+300)	$41,100
Interest Revenue		$300
Gain on Sale of Investments		$800
Investments-Iceline, Inc. Bonds		$40,000

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