Pincher Company purchased 50 Issac Company 12% 10-year $1000 bonds on January 1 2017 for $50000. The bonds pay interest semiannually on January 1. On January 1 2018 after receipt of interest Pincher Company sold 30 of the bonds for $28300.
Instructions
Prepare the journal entries to record the transactions described above.

Question

Cayla Andrews · Accepted Answer

Final Answer :   Jan. 1,2017 Debt Investments 50 , 000  Cash  50 , 000  Dec. 31, 2017 Interest Receivable  ( $ 50 , 000 × 12 % )   6 , 000  Interest Revenue  6 , 000  Jan. 1, 2018 Cash  6 , 000  Interest Receivable  6 , 000  Jan 1, 2018  Cash  28 , 300  Loss On Sale of Debt Investments  1 , 700  Debt Investments  ( 30 / 50 × 50.000 ) 30 , 000 \begin{array}{llr}  	ext {  Jan. 1,2017\quad Debt Investments}  & 50,000\\quad\quad\quad\quad\quad\quad 	ext { Cash }  & & 50,000\\ 	ext { Dec. 31, 2017\quad Interest Receivable   (\$ 50,000 	imes 12 \%)   }  & 6,000\ \quad\quad\quad\quad\quad\quad\quad	ext { Interest Revenue }  & & 6,000\\ 	ext { Jan. 1, 2018\quad Cash }  & 6,000\\quad\quad\quad\quad\quad\quad 	ext { Interest Receivable }  & & 6,000\\ 	ext { Jan 1, 2018 \quad Cash }  & 28,300\\quad\quad\quad\quad\quad\quad 	ext { Loss On Sale of Debt Investments }  & 1,700\ \quad\quad\quad\quad\quad\quad	ext {  Debt Investments   (30 / 50 	imes 50.000)  }  & & 30,000\\end{array}  Jan. 1,2017 Debt Investments  Cash   Dec. 31, 2017 Interest Receivable  ( $50 , 000 × 12% )    Interest Revenue   Jan. 1, 2018 Cash   Interest Receivable   Jan 1, 2018  Cash   Loss On Sale of Debt Investments   Debt Investments  ( 30/50 × 50.000 ) ​ 50 , 000 6 , 000 6 , 000 28 , 300 1 , 700 ​ 50 , 000 6 , 000 6 , 000 30 , 000 ​

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