Question - Foren Corporation had the following transactions pertaining to debt investments.
Jan. 1 Purchased 50 8%, $1,000 Chocolate Co. bonds for $50,000 cash plus brokerage fees of $900. Interest is payable semiannually on July 1 and January 1.
July 1 Received semiannual interest on Chocolate Co. bonds.
July 1 Sold 30 Chocolate Co. bonds for $34,000 less $500 brokerage fees.
Instructions
(a) Journalize the transactions.
(b) Prepare the adjusting entry for the accrual of interest at December 31.