General Accounting

AC company. purchased $24,000 of 4%, 10-year DCshoe bonds on July 12, 2012, directly from the county at par value. The bonds pay semiannual interest on May 1 and November 1. On December 1, 2012, AC company. sold $6,000 of the DCshoe bonds at 98 plus $20 accrued interest, less a $100 brokerage commission. Assume a 360-day year.

1- Provide the journal entry for the purchase of the bonds on July 12, plus 72 days of accrued interest.

investement DC=

interest receivable=

cash=

2. Provide the journal entry for semiannual interest on November 1.

cash=

interest receibalbe=

interect revenue=

3. Provide the journal entry for sale of the bonds on December 1.

cash=

loss on sale =

interest revenue=

invenstement in DCshoe=

4. Provide the adjusting entry for accrued interest of $120 on December 31, 2012.

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