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In: Accounting

On September 1, 2019, the entity bought the bonds belonging to the private sector with a...

On September 1, 2019, the entity bought the bonds belonging to the private sector with a nominal value (par value) of $400,000 with an annual interest payment of 12% through the bank. The related bonds were sold on February 1, 2020 with a bank equivalent of $424,000 .

a- Please show the journal entries required on 31 December 2019.

b- Show the journal entries required on February 1, 2020.

c- If these bonds were sold on February 1, 2020 for $418.000 show the journal entries.

Solutions

Expert Solution

Here Journal Entries for February 1, 2020 are made on assumption that the Sale Value (price) does not include interest revenue on bonds upto date of sale.

ekkarill92 answered 2 years ago
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