Question

Glaser Company had the following transactions pertaining to debt securities held as a short-term investment. Jan....

Glaser Company had the following transactions pertaining to debt securities held as a short-term investment.

Jan. 1 Purchased 60, 8%, $1,000 Dexter Company bonds for $60,000 cash plus brokerage fees of $800. Interest is payable semiannually on July 1 and

January 1. July 1 Received semiannual interest on Dexter Company bonds.

Oct. 1 Sold 30 Dexter Company bonds for $32,000 plus accrued interest less $500 brokerage fees.

Instructions

(a) Journalize the transactions.

(b) Prepare the adjusting entry for the accrual of interest on December 31.

Homework Answers

Answer #1

a) Journal entry

Date account and explanation Debit Credit
Jan 1 Investment in Bonds (60000+800) 60800
Cash 60800
(To record investment)
July 1 Cash (60000*8%*6/12) 2400
Interest revenue 2400
(To record interest)
Oct 1 Cash (32000+600-500) 32100
Investment in bonds (608000/60*30) 30400
Interest revenue (30000*8%*3/12) 600
gain on sale of investment 1100
(To record sale of investment)

b) Adjusting entry

date account and explanation Debit Credit
Dec 31 Interest receivable (30000*8%*3/12) 600
Interest revenue 600
(To record interest)
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Torres Corporation had the following transactions pertaining to debt investment: Jan. 1, 2014 Purchased 120 Abongwa...
Torres Corporation had the following transactions pertaining to debt investment: Jan. 1, 2014 Purchased 120 Abongwa Co. 11%, $1,000 bonds for $120,000 cash. Interest is payable $110,000 annually on January 1. Dec. 31, 2014 Accrued interest on Abongwa Co. bonds. Jan. 1, 2015 Received interest on Abongwa Co. bonds. July 1, 2015 Sold 30 Abongwa Co. bonds for $35,000 cash. Instructions: Journalize the transactions. GENERAL JOURNAL DATE LP Debit Credit
Bond Investment Transactions Journalize the entries to record the following selected bond investment transactions for Starks...
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 $78,000 of Iceline, Inc. 9% bonds at 100 plus accrued interest of $1,170, paying interest semiannually. b. Received first semiannual interest payment. c. Sold $52,000 of the bonds at 103 plus accrued interest of $590.
Bond Investment Transactions Journalize the entries to record the following selected bond investment transactions for Starks...
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 $96,000 of Iceline, Inc. 9% bonds at 100 plus accrued interest of $1,440, paying interest semiannually. Investments-Iceline, Inc. Bonds Interest Receivable Cash b. Received first semiannual interest payment. Cash Interest Receivable Interest Revenue c. Sold $64,000 of the bonds at 102 plus accrued...
During its first year of operations, Bebo's Corporation had the following transactions pertaining to its common...
During its first year of operations, Bebo's Corporation had the following transactions pertaining to its common stocks: Jan 10: Issued 90,000 shares for cash at $10 per share July 1: issued 50,000 shares for cash at $20 per share Instructions (a) Journalize the transactions, assuming that the common stock has a par value of $10 per per share. (b) Journalize the transactions, assuming that the common stock is no-par with a stated value of $5 per share.
Wildhorse Corporation had the following transactions pertaining to debt investments. 1. Purchased 40 9%, $1,600 Leeds...
Wildhorse Corporation had the following transactions pertaining to debt investments. 1. Purchased 40 9%, $1,600 Leeds Co. bonds for $64,000 cash. Interest is payable annually on January 1, 2020. 2. Accrued interest on Leeds Co. bonds on December 31, 2020. 3. Received interest on Leeds Co. bonds on January 1, 2021. 4. Sold 30 Leeds Co. bonds for $52,800 on January 1, 2021. Exercise 16-06 On February 1, Sheridan Company purchased 800 shares (2% ownership) of Givens Company common stock...
Bond Investment Transactions Journalize the entries to record the following selected bond investment transactions for Starks...
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. 7% bonds at 100 plus accrued interest of $700, paying interest semiannually. fill in the blank 633f5ef48fda07a_2 fill in the blank 633f5ef48fda07a_3 fill in the blank 633f5ef48fda07a_5 fill in the blank 633f5ef48fda07a_6 fill in the blank 633f5ef48fda07a_8 fill in...
Bond Investment Transactions Journalize the entries to record the following selected bond investment transactions for Starks...
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...
Accounting for Equity Securities—Influential The Dunn Company had the following transactions and adjustment related to a...
Accounting for Equity Securities—Influential The Dunn Company had the following transactions and adjustment related to a stock investment: 2016 Jan. 15 Purchased 12,000 shares of Van, Inc.’s common stock at $10 per share plus a brokerage commission of $900. These shares represent a 30 percent ownership of Van’s common stock. Dec. 31 Received a cash dividend of $2.25 per share of common stock from Van. Dec. 31 Made the adjusting entry to reflect income from the Van stock investment. Van’s...
Crane Corporation had the following transactions pertaining to debt investments. 1. Purchased 40 8%, $1,450 Leeds...
Crane Corporation had the following transactions pertaining to debt investments. 1. Purchased 40 8%, $1,450 Leeds Co. bonds for $58,000 cash. Interest is payable annually on January 1, 2020. 2. Accrued interest on Leeds Co. bonds on December 31, 2020. 3. Received interest on Leeds Co. bonds on January 1, 2021. 4. Sold 30 Leeds Co. bonds for $47,850 on January 1, 2021. Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually....
Survivor Company, a public company, had the following transactions in securities during 2017: a) Purchased $1,000,000...
Survivor Company, a public company, had the following transactions in securities during 2017: a) Purchased $1,000,000 par value of 5% Diamond Ltd. bonds (when the market interest rate was 4%), on January 1st, 2017 (right after the interest was paid). The bonds will mature on July 1, 2023, and pay interest on July 1st and January 1st. The bonds will be an amortized cost investment. b) Purchased 100,000 common shares of Midtel Ltd., a publicly-traded company, as an FVTOCI investment...