Gillooly Co. purchased $360,000 of 6%, 20-year Lumpkin County bonds on May 11, Year 1, directly from
Question:
Gillooly Co. purchased $360,000 of 6%, 20-year Lumpkin County bonds on May 11, Year 1, directly from the county, at their face amount plus accrued interest. The bonds pay semiannual interest on April 1 and October 1. On October 31, Year 1, Gillooly Co. sold $90,000 of the Lumpkin County bonds at 98 plus $450 accrued interest less a $200 brokerage commission. Provide journal entries for the following:
a. The purchase of the bonds on May 11 plus 40 days of accrued interest.
b. Semiannual interest on October 1.
c. Sale of the bonds on October 31.
d. Adjusting entry for accrued interest on December 31, Year 1.
e. The receipt of the face value of the remaining bonds at their maturity on October 1, Year 20.
Step by Step Answer:
Accounting
ISBN: 9781337902687
28th Edition
Authors: Carl S. Warren, Christine Jonick, Jennifer Schneider