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Referring to information in Brief Exercise 14-18, assume that Henry Inc. sold its holdings of Container...

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Accounting

Referring to information in Brief Exercise 14-18, assume thatHenry Inc. sold its holdings of Container Corpora-tion bonds onJuly 2, 2020, for $4,800. Record the sale of the debt investment,eliminating the Fair Value Adjust-ment account upon sale.

brief 14-18 Henry Inc. purchased $5,000 of ContainerCorporation’s 5% bonds at par. The purchase is made on January1,

2020, and the investment is classified as a trading security. AtJune 30, 2020, Henry Inc. received semiannual

interest of $125, and the fair value of the bonds was $4,800.Prepare Henry’s journal entries for (a) the purchase

of the investment, (b) the interest received, and (c) the fairvalue adjustment.

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