Ruben Company purchased $100,000 of Evans Company bonds at 100. Ruben later sold the bonds at $104,500 plus $500 in accrued interest. The journal entry to record the sale of the bonds would be:

Question

Quizplus · Accepted Answer

The cash received is $105,000, which includes $104,500 for the bonds and $500 for accrued interest. The investment in bonds is credited for the original cost of $100,000, and the gain on sale is $4,500 ($104,500 - $100,000). The $500 is credited to interest revenue.

Ruben Company Purchased $100,000 of Evans Company Bonds at 100