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> ) ⓘ ezto.mheducation.com/hm.tpx Prepare journal entries to record the following transactions involving the short-term securities investments of Krum Co., all of which occurred during year 2015. July 30, 2015, and maturing January 30, 2016 (categorized as available-for-sale securities). transaction a. (Use 360 days in a year. Do not round your intermediate calculations.) b. On October 30, received a check from Houtte for 90 days’ interest on the debt securities purchased in 1 On August 1, paid $450,000 cash to purchase Houtte’s 9% debt securities ($450,000 principal), dated July 30, 2015, and maturing January 30, 2016 (categorized as available-for-sale securities). the debt 2 On October 30, received a check from Houtte for 90 days interest on the debt securities purchased in transaction a Credit
Expert Answer
Answer:
1
| Date | Description | Debit $ | Credit $ |
| 1-Aug-15 | Investment in 9 % bond-AFS | 450,000 | |
| Cash | 450,000 | ||
| (Being entry for recording purchase of 9 % bond) |
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2
| Date | Description | Debit $ | Credit $ |
| 1-Oct-15 | Cash | 9,986.3 | |
| Interest revenue | 9,986.3 | ||
| (450,000*9%)*90/365 | |||
| (Being entry for recording interest revenue on 9 % bond) |
