Can someone please help me with this homework problem? All A\'s Company (a calen

Question

Can someone please help me with this homework problem?

All A's Company (a calendar year company) purchased a debenture of High Rate, Inc. on 4/1/CY (CY = current year).
Relevant data to these bonds were as follows:

Face $100,000
Interest Payments Semi-annual
Coupon 6%
Aniversary 1-Jan-10
Term 4 years
Purchased 1-Apr-10
Quoted Price @<hidden>
purchase 97.23
Sold 15-nov-10
Quoted Price @<hidden>
disposal 97.50
Broker commission 1%
Purpose: Accumulate funds for construction of new distribution facility

Requirement: Prepare all (properly formatted) journal entries necessary to correctly account for All A's investment in High Rate's debentures.

Explanation / Answer

4/1/2010 6%Debentures A/c $97,230 Cash $97,230 Being 6% debentures purchased 11/15/2010 Interest on debentures A/c $3,250 DebenturesA/c $3,250 Being interest due on debentures Being interest due from April to 15th nov 11/15/2010 Cash $97,500 6%Debentures A/c $97,500 Being 6% debebentures desposed at $97.50 6%Debentures $270 Profit on sale of debentures $270 being profit earned on sale of debentures

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