Answer:
Garzon Company
Journal Entries
January 1 Debit 9.5% Bonds Receivable PBS $45,600
Credit Cash $45,600
To record the purchase of bonds in PBS.
June 30 Debit Cash $2,166
Credit Bonds Interest Revenue $2,166
To record the receipt of first semiannual interest.
December 31 Debit Cash $47,766
Credit 9.5% Bonds Receivable $45,600
Credit Bonds Interest Revenue $2,166
To record the receipt of both principal and second semiannual interest.
January 1 Debit 9% Bonds Receivable PBS $52,000
Credit Cash $52,000
To record the purchase of bonds in PBS.
June 30 Debit Cash $2,340
Credit Bonds Interest Revenue $2,340
To record the receipt of first semiannual interest.
December 31 Debit Cash $54,340
Credit 9% Bonds Receivable $52,000
Credit Bonds Interest Revenue $2,340
To record the receipt of both principal and second semiannual interest.
Explanation:
a) Data and Analysis:
January 1 9.5% Bonds Receivable PBS $45,600 Cash $45,600
June 30 Cash $2,166 Bonds Interest Revenue $2,166
December 31 Cash $47,766 9.5% Bonds Receivable $45,600 Bonds Interest Revenue $2,166
January 1 9% Bonds Receivable PBS $52,000 Cash $52,000
June 30 Cash $2,340 Bonds Interest Revenue $2,340
December 31 Cash $54,340 9% Bonds Receivable $52,000 Bonds Interest Revenue $2,340
