Gillooly Co. purchased $99,000 of 10%, 20-year Lumpkin County bonds on May 11, Year 1, directly from the county, at their face amount plus accrued interest. The bonds pay semiannual interest on April 1 and October 1. On October 31, Year 1, Gillooly Co. sold $32,400 of the Lumpkin County bonds at 97 plus $270 accrued interest less a $105 brokerage commission.
Required:
| Journalize the entries to record the following: a. | The purchase of the bonds on May 11 plus 40 days of accrued interest.* | b. | Semiannual interest on October 1.* | c. | Sale of the bonds on October 31.* | d. | Adjusting entry for accrued interest on December 31, Year 1.* | e. | The receipt of the face value of the remaining bonds at their maturity on April 1, Year 20.* | | *Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Assume a 360-day year. Do not round your intermediate calculations and round final answers to the nearest dollar. | CHART OF ACCOUNTS | Gillooly Co. | General Ledger | | ASSETS | 110 | Cash | 111 | Petty Cash | 120 | Accounts Receivable | 121 | Allowance for Doubtful Accounts | 131 | Notes Receivable | 132 | Interest Receivable | 141 | Merchandise Inventory | 145 | Office Supplies | 146 | Store Supplies | 151 | Prepaid Insurance | 161 | Investments-Lumpkin County Bonds | 165 | Valuation Allowance for Trading Investments | 166 | Valuation Allowance for Available-for-Sale Investments | 181 | Land | 191 | Store Equipment | 192 | Accumulated Depreciation-Store Equipment | 193 | Office Equipment | 194 | Accumulated Depreciation-Office Equipment | | LIABILITIES | 210 | Accounts Payable | 221 | Notes Payable | 231 | Interest Payable | 241 | Salaries Payable | 251 | Sales Tax Payable | | EQUITY | 311 | Common Stock | 312 | Paid-In Capital in Excess of Par-Common Stock | 321 | Preferred Stock | 322 | Paid-In Capital in Excess of Par-Preferred Stock | 331 | Treasury Stock | 332 | Paid-In Capital from Sale of Treasury Stock | 340 | Retained Earnings | 350 | Unrealized Gain (Loss) on Available-for-Sale Investments | 351 | Cash Dividends | 352 | Stock Dividends | | | REVENUE | 410 | Sales | 611 | Interest Revenue | 612 | Dividend Revenue | 631 | Gain on Sale of Investments | 641 | Unrealized Gain on Trading Investments | | EXPENSES | 511 | Cost of Merchandise Sold | 512 | Bad Debt Expense | 515 | Credit Card Expense | 516 | Cash Short and Over | 520 | Salaries Expense | 531 | Advertising Expense | 532 | Delivery Expense | 533 | Repairs Expense | 534 | Selling Expenses | 535 | Rent Expense | 536 | Insurance Expense | 537 | Office Supplies Expense | 538 | Store Supplies Expense | 561 | Depreciation Expense-Store Equipment | 562 | Depreciation Expense-Office Equipment | 590 | Miscellaneous Expense | 710 | Interest Expense | 731 | Loss on Sale of Investments | 741 | Unrealized Loss on Trading Investments | | |