Penn Farms is a grower of hybrid seed corn for Bend Genetics Corporation. It has had two

Question:

Penn Farms is a grower of hybrid seed corn for Bend Genetics Corporation. It has had two exceptionally good years and has elected to invest its excess funds in bonds. The following selected transactions relate to bonds acquired as an investment by Penn Farms, whose fiscal year ends on December 31.

2022 Jan. 1 Purchased at par $600,000 of Dover Corporation 10-year, 7% bonds dated January 1, 2022, directly from the issuing corporation. The bonds pay interest annually on January 1.

Dec. 31 Accrual of interest at year-end on the Dover bonds.

Assume that all intervening transactions and adjustments have been properly recorded and the number of bonds owned has not changed from December 31, 2022, to December 31, 2024.

2025 Jan. 1 Received the annual interest on the Dover bonds.

Jan. 1 Sold $300,000 of Dover bonds at 110% of face value (110).

Dec. 31 Accrual of interest at year-end on the Dover bonds.

Instructions
Journalize the listed transactions for the years 2022 and 2025.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...

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