The following transactions relate to Portland Cement Ltd.’s investment in the debt securities of Widget Makers Inc. during 2024 and 2025. Portland is a public company and purchased the investment to earn interest income. 

2024

Jan. 1 Purchased $120,000 of Widget Makers Inc. eight-year, 7% bonds for $135,666, to yield a market interest rate of 5%. Interest is payable semi-annually on July 1 and January 1. 

July 1 Received semi-annual interest on the bonds. 

Dec. 31 Accrued interest at Portland’s year end. 

2025 

Jan. 1 Recorded receipt of interest payment from bonds. 

July 1 Recorded receipt of interest payment from bonds. 

2 Sold the bonds on the open market for $131,000. 

Instructions 

a. Record the above transactions.

b. What is the balance in the investment asset account on December 31, 2024?