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Starship Enterprises enters into the following transactions during 2016 and 2017: Transactions: 2016 Jan. 1 Purchased $100,000.00 face value of Northern Lights Inc. bonds at
Starship Enterprises enters into the following transactions during 2016 and 2017:
Transactions: | ||
2016 | ||
Jan. | 1 | Purchased $100,000.00 face value of Northern Lights Inc. bonds at face value. The newly issued bonds have an interest rate of 4.00% paid semiannually on June 30 and December 31. The bonds mature in five years. |
June | 30 | Received interest on the Northern Lights Inc. bonds. |
Dec. | 31 | Received interest on the Northern Lights Inc. bonds. |
2017 | ||
Jan. | 1 | Sold the Northern Lights Inc. bonds for $102,000.00. |
Required:
1. | Prepare all necessary journal entries on Starships records to account for its investment in the Northern Lights bonds. |
2. | Why was Starship able to sell its Northern Lights bonds for $102,000.00? |
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