On January 1, 2014, Brenner Company purchased at face value, a $1,000, 10% bond
ID: 2458668 • Letter: O
Question
On January 1, 2014, Brenner Company purchased at face value, a $1,000, 10% bond that pays interest on January 1 and July 1. Brenner Company has a calendar year end.
The entry for the receipt of interest on January 1, 2015 is
Answer
Cash........................................................................................ 110
Interest Revenue............................................................. 110
Cash........................................................................................ 100
Interest Receivable.......................................................... 100
Cash........................................................................................ 40
Interest Revenue............................................................. 40
Cash........................................................................................ 50
Interest Receivable.......................................................... 50
Cash........................................................................................ 110
Interest Revenue............................................................. 110
Cash........................................................................................ 100
Interest Receivable.......................................................... 100
Cash........................................................................................ 40
Interest Revenue............................................................. 40
Cash........................................................................................ 50
Interest Receivable.......................................................... 50
Explanation / Answer
Answer: Cash........................................................................................ 50
Interest Receivable.......................................................... 50
=1000*10%*1/2=$50
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