This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: 1. Investment in debt securities at discount On July 1, 2010, Sprinkle Co. purchased $120,000 of 8% bonds for $115,252.37 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2015. Instructions: (a) Prepare the journal entry on July 1, 2010. (b) The bonds are sold on November 1, 2011 at 103 plus accrued interest. Amortization was recorded by the effective interest rate method. Prepare all entries required to properly record the sale.(show the calculation) Interest Receivable 3200 Available for sale securities 281.27 Interest Revenue 3481.27 Cash 126800 Interest receivable 3200 Available for sale securities 116323.74 Gain on Available for sale securities 7276.26 Or Available for sale securities 281.27 Interest Revenue 281.27 Cash 126800 Interest revenue 3200 Available for sale securities 116323.74 Gain on Available for sale securities 7276.26 Page 2...
View Full Document
This note was uploaded on 03/27/2012 for the course ACCT 3312 taught by Professor Staff during the Spring '08 term at Texas A&M University, Corpus Christi.
- Spring '08