Glaser Company Had the Following Transactions Pertaining to Debt Securities

question 190

Essay

Glaser Company had the following transactions pertaining to debt securities held as a short-term investment.
Jan. 1 Purchased 40, 8%, $1,000 Adcock Company bonds for $40,000 cash. Interest is payable semiannually on July 1 and January 1.
July 1 Received semiannual interest on Adcock Company bonds.
Oct. 1 Sold 30 Adcock Company bonds for $32,000 plus accrued interest.
Instructions
(a) Journalize the transactions.
(b) Prepare the adjusting entry for the accrual of interest on December 31.

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Definitions:

Risk Taking Behavior

The propensity to engage in activities that have the potential to result in significant loss or gain.

Revenue and Expense Analysis

An examination of the income generated and costs incurred by a business, aiming to understand financial health and performance.

Management Function

The activities and duties that managers engage in to plan, organize, lead, and control an organization's resources effectively.

Controlling

Within management, it refers to the act of overseeing performance and implementing changes to meet targeted goals.