On September 1, 2012, Parsons Company purchased $84,000, 10 year, 7% government bonds at 100 plus accrued interest. The semi-annual interest payment dates are June 30 and December 31. Interest calculations are done by the month.

Required:

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Journalize the entry to record the bond purchase.

Journalize the receipt of interest on December 31, 2012.

Journalize the February 1, 2013 sale of the bonds for $82,000 plus accrued interest.

For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".

a. 2012 Sept. 1	Cash Bonds Payable Interest Expense Investments-Government Bonds Correct 2	Correct 3	Correct 4
	Cash Interest Payable Interest Receivable Interest Revenue Correct 5	Correct 6	Correct 7
	Cash Interest Payable Interest Revenue Investments-Government Bonds Correct 8	Correct 9	Correct 10
b. 2012 Dec. 31	Cash Interest Receivable Interest Revenue Investments-Government Bonds Correct 12	Correct 13	Correct 14
	Cash Interest Payable Interest Receivable Investments-Government Bonds Correct 15	Correct 16	Correct 17
	Cash Discount on Bonds Payable Interest Expense Interest Revenue Correct 18	Correct 19	Correct 20
c. 2013 Feb. 1	Cash Interest Expense Interest Revenue Investments-Government Bonds Correct 22	Correct 23	Correct 24
	Gain on Sale of Investments Interest Payable Interest Receivable Loss on Sale of Investments Correct 25	Correct 26	Correct 27
	Cash Gain on Sale of Investments Interest Payable Investments-Government Bonds Correct 28	Correct 29	Correct 30
	Cash Interest Receivable Interest Revenue Loss on Sale of Investments Correct 31	Correct 32	Correct 33