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

Gonzalez Company acquired $173,400 of Walker Co., 7% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $49,800 of the bonds for 98.

Journalize entries to record the following in Year 1:

For a compound transaction, if an amount box does not require an entry, leave it blank.

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

May 1

b. The semiannual interest received on November 1.

Nov. 1

c. The sale of the bonds on November 1.

Nov. 1

d. The accrual of $1,442 interest on December 31.

Dec. 31