Brief Exercise 17-1 Gerfreld Compeny purchased on Januery 1, 2017, es d eld-to-m

Question

Brief Exercise 17-1 Gerfreld Compeny purchased on Januery 1, 2017, es d eld-to-muturny mestment $60,000 uf t et 9% 5-Yeer bunds uf dhester oroorstur fur $74,006, wnch prov des en 12% return. Prepare Gar eld nurnal entris ar a th purena of the i estmert and h the reOR t of nnual interest ard diecaunt anartization. A s m. cti e ntere amnrtzat on is ii Ad Rou nd artw ers to 0 dec mar )1acas, a. 1 2 rad t a aunt tit as are auto mati an ind nted when amount is entered. Do not indent manualy, If no entry is required, select "No Entry" for the account titles and enter for the amounts.) . Account Titles Click If you would like to Show Work for this question Open Shaw wonk

Explanation / Answer

Required journal entries are as prepared below:

Year Particulars L.F Debit ($) Credit ($) 2017 (a) Investment in 9% 5-year bonds 80,000 Cash   74,086 Discount on bond investment 5,914 (for cash invested in bonds) (b) Cash (80,000*9%) 7200 Discount on Bond Investment 949.46 Investment revenue (74,086*11%) 8149.46 (for interestand discount amortization for one year)

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