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Entries for Investment in Bonds, Interest, and Sale of Bonds

Parilo Company acquired $166,800 of Makofske Company, 6% bonds on May 1, 20Y5, at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, 20Y5, Parilo sold $51,000 of the bonds for 99.

Journalize the entries to record the following under the cost method:

If an amount box does not require an entry, leave it blank.

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a. The initial acquisition of the bonds on May 1.

20Y5 May 1	CashInterest ReceivableInterest RevenueInvestments-Makofske Co. BondsNotes Receivable	- Select -	- Select -
	CashInterest ReceivableInterest RevenueInvestments-Makofske Co. BondsNotes Receivable	- Select -	- Select -

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b. The semiannual interest received on November 1.

20Y5 Nov. 1	CashInterest ReceivableInterest RevenueInvestments-Makofske Co. BondsNotes Receivable	- Select -	- Select -
	CashInterest ReceivableInterest RevenueInvestments-Makofske Co. BondsNotes Receivable	- Select -	- Select -

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c. The sale of the bonds on November 1.

20Y5 Nov. 1	CashGain on Sale of InvestmentsInterest ReceivableInvestments-Makofske Co. Bonds	- Select -	- Select -
	Gain on Sale of InvestmentsInterest ReceivableLoss on Sale of InvestmentsNotes Receivable	- Select -	- Select -
	CashGain on Sale of InvestmentsInterest ReceivableInvestments-Makofske Co. BondsNotes Receivable	- Select -	- Select -

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d. The accrual of $1,158 interest on December 31, 20Y5.

20Y5 Dec. 31	CashInterest RevenueInterest ReceivableInvestments-Makofske Co. BondsNotes Receivable	- Select -	- Select -
	CashInterest RevenueInterest ReceivableInvestments-Makofske Co. BondsNotes Receivable	- Select -	- Select -