Entries for Investment in Bonds, Interest, and Sale of Bonds

Parilo Company acquired $147,000 of Makofske Company, 5% bonds on May 1, 20Y5, at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, 20Y5, Parilo sold $55,800 of the bonds for 96.

Journalize the entries to record the following under the cost method:

If an amount box does not require an entry, leave it blank.

a. The initial acquisition of the bonds on May 1.

b. The semiannual interest received on November 1.

c. The sale of the bonds on November 1.

d. The accrual of $760 interest on December 31, 20Y5.

a. The initial acquisition of the bonds on May 1 . 20Y5 May 1 Interest Receivable Interest Revenue Investments-Makofske Co. Bonds Notes Receivable Cash Interest Receivable Interest Revenue Investments-Makofske Co. Bonds Notes Receivable b. The semiannual interest received on November 1 . 20Y5 Nov. 1 Cash Interest Receivable Interest Revenue Investments-Makofske Co. Bonds Notes Receivable Cash Interest Receivable Interest Revenue Investments-Makofske Co. Bonds Notes Receivable c. The sale of the bonds on November 1. 20 Y5 Nov. 1 Cash Gain on Sale of Investments Interest Receivable Investments-Makofske Co. Bonds Gain on Sale of Investments Interest Receivable Loss on Sale of Investments Notes Receivable Cash Gain on Sale of Investments Interest Receivable 1 Investments-Makofske Co. Bonds 1 Notes Receivable d. The accrual of $760 interest on December 31,20Y5. 20Y5 Dec. 31 Cash Interest Revenue Interest Receivable Investments-Makofske Co. Bonds Notes Receivable Cash Interest Revenue Interest Receivable 2 Investments-Makofske Co. Bonds Notes Receivable