On March 31 2016 Brodie Corporation acquired bonds with a pa

On March 31, 2016, Brodie Corporation acquired bonds with a par value of $400,000 for $425,800. The bonds are due December 31, 2021, carry a 12% annual interest rate, pay interest on June 30 and December 31, and are being held to maturity. The accrued interest is included in the acquisition price of the bonds. Brodie uses straight-line amortization IF

Solution

Journal Entries

date

explanation

debit

credit

31-Mar

investment in debt securities

413800

interest income

12000

cash

425800

30-Jun

cash

24000

interest income

24000

31-Dec

cash

24000

interest income

24000

Journal Entries
date	explanation	debit	credit
31-Mar	investment in debt securities	413800
	interest income	12000
	cash		425800
30-Jun	cash	24000
	interest income		24000
31-Dec	cash	24000
	interest income		24000