Journalize the entries to record the following selected bond investment transact
ID: 2583781 • Letter: J
Question
Journalize the entries to record the following selected bond investment transactions for Hall Trust (refer to the Chart of Accounts for exact wording of account titles):
Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.
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Apr. 1 Purchased for cash $378,000 of Oates City 3% bonds at 100 plus accrued interest of $2,835. June 30 Received first semiannual interest payment. July 31 Sold $152,400 of the bonds at 95 plus accrued interest of $381.Explanation / Answer
Answer:
Date
Description
Debit $
Credit $
1-Apr
Investment -Oates City bonds
378000
Interest receivable
2835
To cash
380835
30-Jun
Cash
5670
Interest receivable
2835
Interest revenue
2835
(378000*3%*1/2)
31-Jul
Cash *
145161
Loss on sale of investment
7620
Interest revenue
381
Investment -Oates City bonds
152400
Working notes for the answer
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*Sales proceeds ($152,400 x 95%).....$144,780
Accrued interest ................................ 381
Total proceeds from sale .................. $145,161
Date
Description
Debit $
Credit $
1-Apr
Investment -Oates City bonds
378000
Interest receivable
2835
To cash
380835
30-Jun
Cash
5670
Interest receivable
2835
Interest revenue
2835
(378000*3%*1/2)
31-Jul
Cash *
145161
Loss on sale of investment
7620
Interest revenue
381
Investment -Oates City bonds
152400
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