Create all entries required to properly record the sale

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Reference no: EM13128809

Investment in debt securities at a discount.

On May 1, 2004, Gipson Corp. purchased $270,000 of 12% bonds, interest payable on January 1 and July 1, for $253,680 plus accrued interest. The bonds mature on January 1, 2010. Amortization is recorded when interest is received by the straight-line method (by months and round to the nearest dollar). (Assume bonds are available for sale.)

Instructions

(a) Prepare the entry for May 1, 2004.

(b) The bonds are sold on August 1, 2005 for $255,000 plus accrued interest. Prepare all entries required to properly record the sale

Reference no: EM13128809

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