Question
On July 1, 2019, Cyclic Inc. issued $1,000,000 in principal of 6% bonds due in July 2024. The bond pays interest quarterly on January 2,
On July 1, 2019, Cyclic Inc. issued $1,000,000 in principal of 6% bonds due in July 2024. The bond pays interest quarterly on January 2, April 1, July 1, and October 1.
On November 1, 2020, Epimetheus Bank sold $5000 in face value of these bonds to Saturn Bank for $4381 plus $25 in accrued interest. Epimetheus Bank had recorded this investment as trading debt and its carrying value was $4527.
Record the journal entries for Epimetheus Bank's sale of these bonds.Check all that apply.
Dr. Cash -- $4406
Dr. Cash -- $4381
Dr. Cash -- $4356
Cr. Realized gain -- $146
Cr. Trading debt -- $4527
Cr. Interest revenue -- $25
Dr. Realized loss -- $146
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