EX 15-4 Entries for investment in bonds, interest, and sale of bonds

The following bond investment transactions were completed during 2012 by Mission Company:

Jan. 21.

Purchased 50, $1,000 par value government bonds at 100 plus 20 days’ accrued interest. The bonds pay 4.5% annual interest on June 30 and January 1.

June 30.

Received semiannual interest on bond investment.

Sept. 5.

Sold 24, $1,000 par value bonds at 97 plus $201 accrued interest.

a. Journalize the entries for these transactions.

b. Provide the December 31, 2012, adjusting journal entry for semiannual interest earned from the bond coupon.