Jenek Corporation had the following transactions pertaining to debt investments. 1. Purchased 25, 9%, $1,600 Leeds Co. bonds for $40,000 cash. Interest is payable annually on January 1, 2017.
2. Accrued interest on Leeds Co. bonds on December 31, 2017.
3. Received interest on Leeds Co. bonds on January 1, 2018.
4. Sold 15 Leeds Co. bonds for $27,200 on January 1, 2018.
Journalize the transactions.

Solution :

Date                Account title and explanation                     Debit($)    Credit($)

Jan 1, 2017    Investment in bonds of Leeds Co.                 40,000

                     Cash                                                                                 40,000

Dec 31,2017   Interest receivable                                         3600

                      Interest revenue                                                             3600

Jan 1,2018     Cash                                                                3600

                    Interest receivable                                                           3600

Jan 1, 2018    Cash                                                                27,200

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