Glover Corporation purchased bonds with a face value of $300,000 for $307,493 34 on January 1, 2018 The bonds carry a face rate of interest of 12 , pay interest semiannually on June 30 and December 31, were purchased to be held to maturity, are due December 31, 2020, and were purchased to yield 11 On January 1, 2019, in contemplation of a major acquisition, the bonds were sold for $300,000 Glover uses the effective interest method Required 1 Prepare journal entries to record the purchase of the bonds, the first two interest receipts, and the sale of the bonds 2 Next Level Which of the following is an acceptable reason for a company to sell a held to maturity debt security prior to its maturity CHART OF ACCOUNTS Glover Corporation General Ledger ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Equipment 189 Accumulated Depreciation 191 Investment in Held to Maturity Debt Securities LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings REVENUE 411 Sales Revenue 431 Interest Income 434 Gain on Sale of Debt Securities EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 599 Loss on Sale of Debt Securities 910 Income Tax Expense General Journal Prepare journal entries to record the purchase of the bonds on January 1, 2018 and the first two interest receipts on June 30 and December 31, 2018 Additional Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST REF DEBIT CREDIT 1 2 3 4 5 6 7 8 Prepare journal entry to record the sale of the bonds on January 1, 2019 Additional Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST REF DEBIT CREDIT 1 2 3 Next Level Which of the following is an acceptable reason for a company to sell a held to maturity debt security prior to its maturity an isolated, nonrecurring or unusual event the need for cash a change in market rates

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Glover Corporation purchased bonds with a face value of $300,000 for $307,493.34 on January 1, 2018. The bonds carry a face rate of interest of

Glover Corporation purchased bonds with a face value of $300,000 for $307,493.34 on January 1, 2018. The bonds carry a face rate of interest of 12%, pay interest semiannually on June 30 and December 31, were purchased to be held to maturity, are due December 31, 2020, and were purchased to yield 11%. On January 1, 2019, in contemplation of a major acquisition, the bonds were sold for $300,000. Glover uses the effective interest method.

Required:

Prepare journal entries to record the purchase of the bonds, the first two interest receipts, and the sale of the bonds.

Next Level Which of the following is an acceptable reason for a company to sell a held-to-maturity debt security prior to its maturity?

CHART OF ACCOUNTS

Glover Corporation

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Prepaid Insurance
181	Equipment
189	Accumulated Depreciation
191	Investment in Held-to-Maturity Debt Securities

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue
431	Interest Income
434	Gain on Sale of Debt Securities

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expenses
599	Loss on Sale of Debt Securities
910	Income Tax Expense

General Journal

Prepare journal entries to record the purchase of the bonds on January 1, 2018 and the first two interest receipts on June 30 and December 31, 2018. Additional Instructions

PAGE 1

GENERAL JOURNAL