Kalyagin Investments acquired $233,600 of Jerris Corp., 690 bonds at their face

Question

Kalyagin Investments acquired $233,600 of Jerris Corp., 690 bonds at their face amount on October 1, 2016. The bonds pay interest on October 1 and April 1. On April 1, 2017, Kalyagin sold $111,200 of Jerris Corp. bonds at 105. Journalize the entries to record the following (refer to the Chart of Accounts for exact wording of account titles and be sure to enter the year as part of the date): 2016 Oct. 1 Initial acquisition of the Jerris Corp. bonds Dec. 31 Adjusting entry for three months of accrued interest earned on the Jerris Corp. bonds 2017 Apr 1 Receipt of semiannual interest 1 Sale of $111,200 of Jerris Corp. bonds, at 105

Explanation / Answer

Date Description Post. Ref. Debit Amount Credit Amount Oct 1, 2016 6% Bonds 233600 Cash 233600 (to record the purchase of bonds) Dec 31, 2016 Interest receivable ($233600*6%*3/12) 3504 Interest income 3504 (to record the accrued interest) Apr 1, 2017 Cash 7008 Interest receivable ($233600*6%*3/12) 3504 Interest income ($233600*6%*3/12) 3504 (to record the interest received) Apr 1, 2017 Cash (1112*105) 116760 6% Bonds (1112*100) 111200 Premium on sale of bonds (1112*5) 5560 (to record sale of bonds)

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