Lance Co. purchased $36,000 of 6%, 10-year Flin Flon City bonds on March 12, 2014, directly from

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Lance Co. purchased $36,000 of 6%, 10-year Flin Flon City bonds on March 12, 2014, directly from the city at face value as a held-for-trading investment. The bonds pay semiannual interest on May 1 and November 1. On December 1, 2014, Lance Co. sold $14,000 of the Flin Flon City bonds at 102 plus $69 accrued interest, less a $300 brokerage commission.
Provide the journal entries, rounding answers to the nearest dollar, for the following:
a. The purchase of the bonds on March 12, plus 131 days of accrued interest.
b. The semiannual interest on May 1 and November 1.
c. The sale of the bonds on December 1.
d. The adjusting entry for accrued interest of two months on December 31.
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Accounting Volume 2

ISBN: 978-0176509743

2nd Canadian edition

Authors: James Reeve, Jonathan Duchac, Sheila Elworthy, Carl S. Warren

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