Question
On July 1, 2021, Juan Inversionista purchased as an investment with the intention of short-term speculation (trading) bonds issued by Amazon at a cost equivalent
On July 1, 2021, Juan Inversionista purchased as an investment with the intention of short-term speculation (trading) bonds issued by Amazon at a cost equivalent to their maturity value of $50,000. The bonds pay interest at 6% per annum payableevery December 31 and June 30. As of December 31, 2021, Amazon bonds have a fair value of $46,000.
- Make the July 1, 2021 journal entry to record the purchase of the debt investment.
- Make the journal entry to record the interest payment on December 31, 2021.
- Make the journal entry to record the change in value of debt investments as of December 31, 2021.
- Juan Inversor is concerned about the continued decline in value of the bonds and decides to sell them on March 6, 2022 at a price of$42,000. Make the journal entry for the sale of the debt investment.
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Sawyers Internal Auditing Enhancing And Protecting Organizational Value
Authors: The Internal Audit Foundation
7th Edition
1634540522, 9781634540520
