The following bond investment transactions were completed during 2016 by Starks Company: ...
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Accounting
The following bond investment transactions were completed during 2016 by Starks Company:
| Jan. | 31 | Purchased 75, $1,000 government bonds at 100 plus 30 days accrued interest. The bonds pay 6% annual interest on July 1 and January 1. |
| July | 1 | Received semiannual interest on bond investment. |
| Aug. | 29 | Sold 35, $1,000 bonds at 98 plus $350 accrued interest. |
Required:
| a. | Journalize the entries for these transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. |
| b. | Provide the December 31, 2016, adjusting journal entry for semiannual interest earned on the bonds. |
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