Mercer Investments acquired $120,000 Jericho Corp., 6% bonds at par value on September 1, 2010. The bonds

Question:

Mercer Investments acquired $120,000 Jericho Corp., 6% bonds at on September 1, 2010. The bonds pay interest on September 1 and March 1. On March 1, 2011, Mercer sold $40,000 Jericho Corp. bonds at 102.
Journalize the entries to record the following:
(a) The initial acquisition of the Jericho Corp. bonds on September 1, 2010.
(b) The adjusting entry for 4 months of accrued interest earned on the Jericho Corp. bonds on December 31, 2010.
(c) The receipt of semiannual interest on March 1, 2011.
(d) The sale of $40,000 Jericho Corp. bonds on March 1, 2011, at 102.

Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...