7) Describe and illustrate how debt and equity securities are reported Jacobs & Co. owns vast amounts of corporate bonds. Suppose Jacobs buys $1,100,000 of Gammercy bonds at face value on January 2, 2018. The Gammercy bonds pay interest at the annual rate of 3% on June 30 and December 31 and mature on December 31, 2037. Jacobs intends to hold the investment until maturity. Requirements 1. Journalize any required 2018 entries for the bond investment. 2. How much cash interest will Jacobs receive each year from Gammercy? 3. How much interest revenue will Jacobs report during 2018 on this bond investment? SOLUTION Requirement 1 Date Accounts and Explanation Debit Credit SOR 200