Bond Investment Transactions Journalize the entries to record the following selected bond investment transactions for Starks...

Bond Investment Transactions

Journalize the entries to record the following selected bond investment transactions for Starks Products:

For a compound transaction, if an amount box does not require an entry, leave it blank.

a. Purchased for cash $108,000 of Iceline, Inc. 9% bonds at 100 plus accrued interest of $1,620, paying interest semiannually.

b. Received first semiannual interest payment.

c. Sold $72,000 of the bonds at 103 plus accrued interest of $820.

Stock Investment Transactions

On September 12, 3,700 shares of Aspen Company are acquired at a price of $32.00 per share plus a $185 brokerage commission. On October 15, a $0.80-per-share dividend was received on the Aspen Company stock. On November 10, 1,480.00 shares of the Aspen Company stock were sold for $27 per share less a $74 brokerage commission.

When required, round final answers to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank.

Prepare the journal entries for the original purchase, the dividend, and the sale under the cost method.

Sept. 12

Oct. 15

Nov. 10

Expert Solution


	General Journal	Debit	Credit
a	Investments-Iceline Inc. Bonds	$ 108,000
	Interest Receivable	$ 1,620
	Cash		$ 109,620

b	Cash (108000*9%/2)	$ 4,860
	Interest Receivable		$ 1,620
	Interest Revenue		$ 3,240

c	Cash ((72000*1.03)+820 )	$ 74,980
	Interest Revenue		$ 820
	Gain on sale of investments		$ 2,160
	Investments-Iceline Inc. Bonds		$ 72,000

2

Prepare the journal entries for the original purchase, the dividend, and the sale under the cost method.

Sept. 12	Investment in Aspen Company (3700*32+185)	$ 118,585
	Cash		$ 118,585
Oct. 15	Cash (3700*.80)	$ 2,960
	Dividend revenue		$ 2,960
Nov. 10	Cash (1480*27-74)	$ 39,886
	Loss on sale of Investment in Aspen Company	$ 7,548

ekkarill92 answered 1 year ago

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