The following bond investment transactions were completed during a recent year by Starks Company: Year 1 Jan. 31 Purchased 75, $1,000 government bonds at 100 plus accrued interest of $375 (one month). The bonds pay 6% annual interest on July 1 and January 1. July 1 Received semiannual interest on bond investment. Aug. 30 Sold 35, $1,000 bonds at 98 plus $350 accrued interest (two months).
a. Journalize the entries for these transactions.
b. Provide the December 31, Year 1, adjusting journal entry for semiannual interest earned on the bonds.
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