Answer:
Journal entries are shown below.
Explanation:
According to the scenario, computation of the given data are as follows,
Short-term security investment = $78,000
Debt securities rate = 12%
Interest on debt securities for 90days = $78,000 × ( 12% × 90÷360 )
= $2,340
So, Journal entries are as follows,
(a) Aug.1, 2017       Short-term security investment A/c Dr.    $78,000
                          To, Cash  A/c           $78,000
                              (Being purchase of debt security is recorded)
(b) Oct.30, 2017       Cash A/c Dr.    $2,340
                          To, Interest  A/c           $2,340
                              (Being interest received is recorded)