On August 1, Year 1, Ant Company sold Bee Company $1,500,000 of 10 year, 6% bonds, dated July 1 at 100 plus accrued interest.

On August 1, Year 1, Ant Company sold Bee Company $1,500,000 of 10 year, 6% bonds, dated July 1 at 100 plus accrued interest. On March 1 Year 2. Bee sold har of the bonds for $782,500 plus accrued interest

Required:

Present entries to record the following transactions:

Bee Company

(a) Purchase of bonds on August 1 Year 1.

(b) Receipt of first semiannual interest amount on December 31, Year 1

(c) The sale of the bonds on March 1, Year 2

Expert Solution

Date	Accounts Titles and Explanation	Debit	Credit

Aug 1	Investments-Ant Company Bonds	$1,500,000
	Interest Receivable	$7,500		($15,00,000 x 6% x 1/12)
	Cash		$1,507,500

Dec 31	Cash	$45,000
	Interest Receivable		$7,500
	Interest Revenue		$37,500	($15,00,000 x 6% x 5/12)

Mar 1	Cash	$782,500
	Gain on Sale of Investments		$25,000
	Interest revenue		$7,500	($750,000 x 6% x 2/12)
	Investments-Ant Company Bonds		$750,000

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