Soto Industries Inc. is an athletic footware company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Soto Industries Inc., which has a fiscal year ending on December 31:

Record these transactions on page 10

Year 1
Apr.	1.	Purchased $100,000 of Welch Co. 6%, 15-year bonds at their face amount plus accrued interest of $500. The bonds pay interest semiannually on March 1 and September 1.
June	1.	Purchased $210,000 of Bailey 4%, 10-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on May 1 and November 1.
Sept.	1.	Received semiannual interest on the Welch Co. bonds.
	30.	Sold $40,000 of Welch Co. bonds at 97 plus accrued interest of $200.
Nov.	1.	Received semiannual interest on the Bailey bonds.
Dec.	31	Accrued $1,200 interest on the Welch Co. bonds.
	31	Accrued $1,400 interest on the Bailey bonds.

Record these transactions on page 11

Year 2
Mar.	1	Received semiannual interest on the Welch Co. bonds.
May	1	Received semiannual interest on the Bailey bonds.

Required:

1.	Journalize the entries to record these transactions. Refer to the information given and the Chart of Accounts provided for the exact wording of the answer choices for text entries.
2.	If the bond portfolio is classified as available for sale, what impact would this have on financial statement disclosure?

Chart of Accounts ASSETS REVENUE 410 Sales 611 Interest Revenue 612 Dividend Revenue 631 Gain on Sale of Investments 641 Urealized Gain an Trading Investments 110 Cash 111 Petty Cash 20 Accounts Receivable 21 Alloance for Doubbful Accounts 31 Nates Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 148 Store Supplies 151 Prepaid Insurance 161 Investments-Welch Co. Bonds 162 Investments-Baley Bonds 185 Valuation Allowance f 166 Valuation Allowance for Available-for-Sale Investments 181 Land 91 Store Equipment 192 Accumulated Depreciation Stare Equipment 193 Office Equipment 94 Accunulated Depreciation-Office Equipment EXPENSES 511 Cost af Merchandise Sold 512 Bad Debt Expense 515 Credit Card Expense 518 Cash Shart and Over 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Repairs Expense 534 Selling Expeses 535 Rent Expense 538 Insurance Expense 537 Office Supplies Expense 538 Stare Suppies Expense 581 Depreciation Expense Store Equipment 582 Depreciation Expense Office 590 Miscelaneous Expes 710 Interest Expes 731 Lass on Sale of Investments 741 Ureaized Loss an Trading Investments for Trading Investments LIABILITIES 210 Accounts Payable 221 Nates Payable 231 Interest Payable 241 Salaries Payable 251 Sales Tax Payable