Winrow Co. purchased 30, 6% Johnston Company bonds for $30,000 cash. Interest is payable semiannually on July 1 and January 1. The entry to record the December 31 interest accrual would include a

Question

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Since interest is payable semiannually on July 1 and January 1, the December 31 interest has not yet been received, but it has accrued. Therefore, the entry would include a debit to Interest Receivable for the accrued interest of $900.

Winrow Co Purchased 30, 6% Johnston Company Bonds for $30,000 Cash