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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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