All categories

3 years ago

Bond Investment Transactions

Business

1 answer:

Kitty [74]3 years ago

4 0

Answer:

Explanation:

The journal entries are shown below:

a) Investment in bonds Dr A/c$120000

Interest receivable Dr A/c$ 1000

To Cash A/c $121000

(purchased of 5% bonds with accrued interest of $1000 on the bonds for cash is recorded)

b) Cash Dr. A/c $3000 ($120,000 × 5% × 6 months ÷ 12 months)

To Interest receivable A/c $1000

To Interest Revenue A/c $2000

(Being the first semiannual interest payment is received)

c) Cash Dr A/c $61100 ($60,000 × 101 + $500)

To Investment in bonds $60000

To Interest Revenue $ 500

To Gain in sale of investment $600

( Being the sale of bond with accrued interest of $500 is recorded and the remaining amount will be credited to the gain in sale of investment)

You might be interested in

Management accounting primarily is concerned with providing:A) information to managers inside the organization as well as inform

Inga [223]

Answer:

The correct answer is C: information to managers inside the organization

Explanation:

Management accounting is a part of accounting that regards the identification, measurement, analysis, and interpretation of accounting information to help managers in the decision-making process to efficiently manage a company’s operations. On the contrary of financial accounting, which is primarily concentrated on the correct organization and reporting of the company’s financial transactions to outsiders (e.g., investors, lenders), managerial accounting is focused on internal decision-making.

5 0

3 years ago

On June 1, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated usefu

Alex_Xolod [135]

Answer:

It is $30,000(C)

Explanation:

Depreciable cost = $90,000

Using straight-line method,

Annual depreciation = $90,000/3

= $30,000.

Hence, depreciation expense at the final year of service is $30,000

We cannot make use of entire cost of equipment of $120,000 because it seemed the company wanted to sell its scrap value for $30,000. Hence, this has been used to reduced it cost to $90,000 which is a depreciable cost .

7 0

3 years ago

What line on a production possibilities curve shows the amounts of goods produced?

Lesechka [4]

The line on a production possibilities curve that shows the amounts of goods produced is called production possibilities frontier.

6 0

3 years ago

Read 2 more answers

A chemical company spent $ 530 comma 000 to produce 150 comma 000 gallons of a chemical that can be sold for $ 5.00 per gallon.

solmaris [256]

Answer:

If the company decides to process it further, it will increase operating income $68,000

Explanation:

Selling the chemical on processing,

the Sales will be = Gallons of chemical produce × Selling price per gallon

= 150,000 × $5

= $750,000

Cost of Processing the chemical = $530,000

Operating Income on selling the chemical:

= Sales - Cost of Processing the chemical

= $750,000 - $530,000

= $220,000

Total cost incurred to process the chemical into a weed killer:

= Cost of Processing the chemical +

= $532000 + $260,000

= $792,000

Sales of 150,000 gallons of weed killer:

= Selling price per gallon × Chemical produce

= $7.20 × 150,000 gallons

= $1,080,000

Operating income on processing to weed killer:

= Sales of 150,000 gallons of weed killer - Total cost incurred to process the chemical into a weed killer

= $1,080,000 - $792,000

= $288,000

So, If the company decides to process it further, it will increase operating income by:

= Operating income on processing to weed killer - Operating Income on selling the chemical

= $288,000 - $220,000

= $68,000

5 0

4 years ago

Learning management systems are also known as knowledge work systems true or false

omeli [17]

The answer is false. Learning management systems is not known as knowledge work systems. Knowledge work systems are maintained by knowledge workers who manage and create knowledge. Knowledge, in this context, is universal and can be moved easily. It can include structured and unstructured documents.

6 0

3 years ago