On January 1 2016 the Warden s Restaurant decides to invest
On January 1, 2016, the Warden’s Restaurant decides to invest in Lake Turner bonds. The bonds mature on December 31, 2030, and pay interest on June 30 and December 31 at 5% annually. The market rate of interest was 5% on January 1, 2016, so the $150,000 maturity value bonds sold for face value. Wardens intend to hold the bonds until December 31, 2030.
Requirements
1. Journalize the transactions related to Warden’s investment in Lake Turner bonds during 2016.
2. In what category would Warden’s report the investment on the December 31, 2016, balance sheet?
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