Question: Prepare journal entries to record the following transactions involving the short-term securities investments of Prairie Co., all of which occurred during year 2011.
a. On August 1, paid $60,000 cash to purchase Better Buy's 10% debt securities ($60,000 principal), dated July 30, 2011, and maturing January 30, 2012 (categorized as available-for-sale securities).
b. On October 30, received a check from Better Buy for 90 days' interest on the debt securities purchased in transaction a.