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

The following bond investment transactions were completed during a recent year by Starks Company:

Year 1
Jan. 31	Purchased 36, $1,000 government bonds at 100 plus accrued interest of $180 (one month). The bonds pay 6% annual interest on July 1 and January 1.
July 1	Received semiannual interest on bond investment.
Aug. 30	Sold 15, $1,000 bonds at 96 plus $150 accrued interest (two months).

a. Journalize the entries for these transactions.

Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank.

Year 1, Jan. 31
Year 1, July 1
Year 1, Aug. 30

b. Provide the December 31, Year 1, adjusting journal entry for semiannual interest earned on the bonds.

Assume a 360-day year. Do not round interim calculations. Round final answers to nearest dollar.

Year 1, Dec. 31