Question

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. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem. Round answers to 0 decimal places, e.g. 5,275.)

No.

Date

Account Titles and Explanation

Debit

Credit
1.
2
3.
4.
Business   Accounting   
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Answer #1
Date Account Titles and Explanation Debit Credit
January 1, 2020 Debt Investments 58000
     Cash 58000
December 31, 2020 Interest Receivable 4640 =58000*8%
   Interest Revenue 4640
January 1, 2021 Cash 4640
     Interest Receivable 4640
January 1, 2021 Cash 47850
    Gain on Sale of Debt investments 4350
    Debt Investments 43500 =58000*30/40
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