Levon Company made the following transactions related to bond investments in 2017: 

June 30 purchased $70,000, 10%, 10-year bonds for $76,000 in cash. Bonds pay interest semi-annually on June 30 and December 31. 

31 December Bond interest is charged every six months. The market value of the bond investment as of December 31, 2017 is $71,400. 

Instructions

(a) Shows how to set up basic link information. 

(b) Provide general journal entries for 2017 transactions. Suppose the bonds are purchased as available-for-sale securities, but have no intention of holding them for more than one year. 

(c) Specify the accounts and amounts receivable in the 2017 financial statements. 

(d) If the bonds are sold for $71,600 in cash on January 1, 2018, submit the journal entry to record the sale.

Answer rating: 100% (QA)

a Setting up basic bond information To set up basic bond information we need to determine the face v... View the full answer