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Debt Investment Transactions, Available-for-Sale Valuation Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, Year 1. The following transactions
Debt Investment Transactions, Available-for-Sale Valuation
Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Rekya Mart Inc., which has a fiscal year ending on December 31:
Year 1 | |
Apr. 1. | Purchased $42,000 of Smoke Bay 5%, 10-year bonds at their face amount plus accrued interest of $350. The bonds pay interest semiannually on February 1 and August 1. |
May 16. | Purchased $98,000 of Geotherma Co. 6%, 12-year bonds at their face amount plus accrued interest of $245. The bonds pay interest semiannually on May 1 and November 1. |
Aug. 1. | Received semiannual interest on the Smoke Bay bonds. |
Sept. 1. | Sold $16,800 of Smoke Bay bonds at 103 plus accrued interest of $70. |
Nov. 1. | Received semiannual interest on the Geotherma Co. bonds. |
Dec. 31 | Accrued $420 interest on Smoke Bay bonds. |
Dec. 31 | Accrued $490 interest on Geotherma Co. bonds. |
Year 2 | |
Feb. 1. | Received semiannual interest on the Smoke Bay bonds. |
May 1. | Received semiannual interest on the Geotherma Co. bonds. |
Required:
1. Journalize the entries to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.
Date | Description | Debit | Credit |
---|---|---|---|
Year 1 | |||
Apr. 1. | |||
May 16. | |||
Aug. 1. | |||
Sept. 1. | |||
Nov. 1. | |||
Dec. 31 Smoke Bay | |||
Dec. 31 Geotherma Co. | |||
Year 2 | |||
Feb. 1. | |||
May 1. | |||
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