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Question
On September 1, Year 1, Parsons Company purchased $84,000 of 10-year, 7% government bonds at 100 plus accrued interest. The semiannual interest payment dates are June 30 and December 31. Interest computations are done by the month.
a. Journalize the entry for the bond purchase.
b. Journalize the receipt of interest on December 31 of the first year.
c. Journalize the sale of the bonds on February 1 of the second year for $82,000 plus accrued interest.
Answer
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