Gonzalez company acquired $153,600 of walker co., 8% bonds on may 1 at their face amount. interest is paid semiannually on may 1 and november 1. on november 1, gonzalez company sold $43,200 of the bonds for 98.journalize entries to record the following in year 1 (refer to the chart of accounts for exact wording of account titles): a. the initial acquisition of the bonds on may 1.b. the semiannual interest received on november 1.c. the sale of the bonds on november 1.d. the accrual of $1,300 interest on december 31.

The Journal entries are as follows:

(i) On may 1,

Investment - Walker Co. A/c    Dr.  $153,600

To cash                                                               $153,600

(To record the initial acquisition of the bonds)

(ii) On November 1,

Cash A/c( $153,600 × 8% × 6/12)   Dr.  $6,144

To Interest revenue                                            $6,144

(To record the semiannual interest received)

(iii) On November 1,

Cash A/c ($43,200 × 98%)          Dr. $30,240

Loss on sale of investment A/c  Dr. $12,960

To Investment - Walker Co.                                $43,200

(To record the sale of the bonds)

(iv) On December 31,

Interest receivable A/c   Dr. $1,300

To Interest revenue                          $1,300

(To record the accrual of $1,300 interest)

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