Asked by Mario Golden on Apr 27, 2024
Verified
On January 2 Penny Company purchased 45 10% $1000 Mikel Company bonds for $45000 cash. Interest is payable annually on January 1. Journalize the entries to record the purchase of the bonds and the accrual of the annual interest on December 31.
Mikel Company Bonds
Debt securities issued by Mikel Company to investors, representing loans made by investors to the company.
Purchase
The act of buying goods, services, or assets in exchange for money or its equivalent.
Annual Interest
The total amount of interest to be paid or earned over the course of a year, typically associated with loans or investments.
- Ascertain and inscribe in financial logs the gains, depletions, dividends accrued, and interest earnings related to investments.
- Chronicle the actions pertaining to the procurement, divestiture, and custody of investment securities, along with modifications for fair value.
Verified Answer
JW
Jaces world HollywoodMay 02, 2024
Final Answer :
Jan. 2Debt Investments45,000 Cash 45,000Dec. 31Interest Receivable ($45,000×10%). 4,500 Interest Revenue4,500\begin{array}{llr} \text { Jan. 2\quad Debt Investments} &45,000\\\quad\quad\quad\quad \text { Cash } &&45,000\\\\ \text {Dec. 31\quad Interest Receivable \( (\$ 45,000 \times 10 \%) \). } &4,500\\ \quad\quad\quad\quad\text { Interest Revenue} &&4,500\\\end{array} Jan. 2Debt Investments Cash Dec. 31Interest Receivable ($45,000×10%). Interest Revenue45,0004,50045,0004,500
Learning Objectives
- Ascertain and inscribe in financial logs the gains, depletions, dividends accrued, and interest earnings related to investments.
- Chronicle the actions pertaining to the procurement, divestiture, and custody of investment securities, along with modifications for fair value.
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