Entries for bond (held-to-maturity) investments The following bond investment transactions were completed by Starks Company: Jan. 31 Purchased 27, $1,000 government bonds at 100 plus accrued interest of $135 (1 month). The bonds pay 6% annual interest on July 1 and January 1, July 1 Received semiannual interest on bond investment. Aug. 30 Sold 12, $1,000 bonds at 98 plus $120 accrued interest (2 months). a. Journalize the entries for these transactions. Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar. If an amount box does not require an entry, leave it blank. 0 Jan. 31 Investments-Government Bonds Interest Receivable 0 Cash 0 July 1 Cash 0 Interest Receivable QL L) Di Interest Revenue 0 Aug. 30 Cash 0 Loss on Sale of Investments 0 Interest Revenue Investments-Government Bonds 0 Feedback Check My Work a. Record the investment at face value. Interest that is receivable on the date of purchase must be recorded as well. Record the interest revenue as earned. Bond principal x interest rate x time = Total interest. Remember to consider any receivable on the books. Calculate the proceeds: First compute the % x face amount of bonds sold. Next, adjust the amount for any accrued interest. To complete the entry, determine any gain or loss on the transaction. b. Journalize the December 31 adjusting entry for semiannual interest earned on the bonds. Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar. If an amount box does not require an entry, leave it blank. Dec. 31 Interest Receivable 0 Interest Revenue 0 c. Journalize the receipt of $15,000 at the bonds' maturity on July 1. If an amount box does not require an entry, leave it blank. July. 1 Cash 0 Investments-Government Bonds 0 Feedback