The following selected transactions relate to certainsecurities acquired by Cust
ID: 2444953 • Letter: T
Question
The following selected transactions relate to certainsecurities acquired by Custom Blueprints, Inc., whose fiscal yearends on December 31: 2002 Sept. 1. Purchased $500,000 ofDonner Company 20-year, 9% bonds dated July 1, 2002, directly fromthe issuing company, for $482,150 plus accrued interest of$7,500. Dec. 31. Received the semiannualinterest on the Donner Company bonds. 31. Recorded bond discount amortization of $300 on the DonnerCompany bonds. The amortization amount was determined usingthe straight-line method. (Assume that all intervening transactions and adjustments havebeen properly recorded and that the number of bonds owned has notchanged from December 31, 2002, to December 31, 2006.) 2007 June 30. Received the semiannualinterest on the Donner Company bonds. Oct. 31. Sold one-half of the DonnerCompany bonds at 96 1/2 plus accrued interest. The brokerdeducted $400 for commission, etc., remitting the balance. Prior to the sale, $375 of discount on one-half of the bonds wasamortized, reducing the carrying amount of those bonds to$243,400. Dec. 31. Received the semiannualinterest on the Donner Company bonds. 31. Recorded bond discount amortization of $450 on the Donner Companybonds. INSTRUCTIONS: Journalize the entries to record the foregoingtransactions. The following selected transactions relate to certainsecurities acquired by Custom Blueprints, Inc., whose fiscal yearends on December 31: 2002 Sept. 1. Purchased $500,000 ofDonner Company 20-year, 9% bonds dated July 1, 2002, directly fromthe issuing company, for $482,150 plus accrued interest of$7,500. Dec. 31. Received the semiannualinterest on the Donner Company bonds. 31. Recorded bond discount amortization of $300 on the DonnerCompany bonds. The amortization amount was determined usingthe straight-line method. (Assume that all intervening transactions and adjustments havebeen properly recorded and that the number of bonds owned has notchanged from December 31, 2002, to December 31, 2006.) 2007 June 30. Received the semiannualinterest on the Donner Company bonds. Oct. 31. Sold one-half of the DonnerCompany bonds at 96 1/2 plus accrued interest. The brokerdeducted $400 for commission, etc., remitting the balance. Prior to the sale, $375 of discount on one-half of the bonds wasamortized, reducing the carrying amount of those bonds to$243,400. Dec. 31. Received the semiannualinterest on the Donner Company bonds. 31. Recorded bond discount amortization of $450 on the Donner Companybonds. INSTRUCTIONS: Journalize the entries to record the foregoingtransactions.Explanation / Answer
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