Brief Exercise 17-4 Hendricks Corporation purchased trading investment bonds for
ID: 2456958 • Letter: B
Question
Brief Exercise 17-4
Hendricks Corporation purchased trading investment bonds for $52,780 at par. At December 31, Hendricks received annual interest of $2,860, and the fair value of the bonds was $50,050.
Prepare Hendricks’ journal entries for (a) the purchase of the investment, (b) the interest received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (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.)
No.
Account Titles and Explanation
Debit
Credit
(a)
(b)
(c)
No.
Account Titles and Explanation
Debit
Credit
(a)
(b)
(c)
Explanation / Answer
Bank or Cash A/c Dr.
To Bond A/c
2860
2860
Bond A/c Dr.
To Bank or Cash A/c
52780
52780
No. Particulars Debit Credit (b) the interest receivedBank or Cash A/c Dr.
To Bond A/c
2860
2860
(a) the purchase of the investmentBond A/c Dr.
To Bank or Cash A/c
52780
52780
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