Prepare journal entries to record the following transactions involving the short-term securities investments of Krum Co.,...

Prepare journal entries to record the following transactions involving the short-term securities investments of Krum Co., all of which occurred during year 2017.

On August 1, paid $76,000 cash to purchase Houtte's 12% debt securities ($76,000 principal), dated July 30, 2017, and maturing January 30, 2018 (categorized as available-for-sale securities).

On October 30, received a check from Houtte for 90 days' interest on the debt securities purchased in transaction a. (Use 360 days in a year. Do not round your intermediate calculations.)

Expert Solution

Journal Entries
Date	Account Title and explanation	Debit	Credit

Aug, 01 2017	Investment - Available for Sale Securities	$ 76,000
	To Cash		$ 76,000
	(To Record the purchase of debt securities)


	Cash ($ 76,000 X 12% X 3/12)	$ 2,280
October 30, 2017	To Interest Income		$ 2,280
	(To Record the interest income reciept from the available for sale securities)

ekkarill92 answered 1 year ago

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