The following transactions relate to bond investments of Livermore Laboratories. The company s fiscal year ends on
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Question:
The following transactions relate to bond investments of Livermore Laboratories. The companys fiscal year ends on December Livermore uses the straightline method to determine interest.
July Purchased $ million of Bracecourt Corporation debentures, due in years June for $ million. Interest is payable on January and July of each year.
October Purchased $ million of Framm Pharmaceuticals debentures, due May for $ plus accrued interest. Interest is payable on June and December of each year.
December Received interest on the Framm bonds.
December Accrued interest.
January Received interest on the Bracecourt bonds.
June Received interest on the Framm bonds.
July Received interest on the Bracecourt bonds.
September Sold $ million of the Framm bonds at plus accrued interest.
December Received interest on the remaining Framm bonds.
December Accrued interest.
January Received interest on the Bracecourt bonds.
February Sold the remainder of the Framm bonds at plus accrued interest.
December Accrued interest.
Required:
Prepare the appropriate journal entries for these longterm bond investments.
By how much will Livermore Labs earnings inc Prepare the appropriate journal entries for these longterm bond investments.
Note: If no entry is required for a transactionevent select No journal entry required" in the first account field. Do not round your intermediate calculations. Enter your answers in whole dollars.
No Date General Journal Debit Credit
July Investment in bonds
Discount on investment in bonds
Cash
October Investment in bonds
Premium on investment in bonds
Interest receivable
Cash
December Cash
Premium on investment in bonds
Interest receivable
Interest revenue
December Interest receivable
Discount on investment in bonds
Interest revenue
December Interest receivable
Premium on investment in bonds
Interest revenue
January Cash
Interest receivable
June Cash
Premium on investment in bonds
Interest receivable
Interest revenue
July Cash
Discount on investment in bonds
Interest revenue
September Interest receivable
Premium on investment in bonds
Interest revenue
September Cash
Loss on sale of investments
Investment in bonds
Premium on investment in bonds
Interest receivable
December Cash
Premium on investment in bonds
Interest revenue
December Interest receivable
Discount on investment in bonds
Interest revenue
December Interest revenue
Premium on investment in bonds
Interest revenue
January Cash
Interest receivable
February Interest receivable
Premium on investment in bonds
Interest revenue
February Cash
Loss on sale of investments
Investment in bonds
Premium on investment in bonds
Interest receivable
December Interest receivable
Discount on investment in bonds
Interest revenue
Related Book For
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