Investments

Flynn Company purchased 70 Rinehart Company 6%, 10- year, $1,000 bonds on January 1, 2020, for $70,000. The bonds pay interest annually on January 1. On January 1, 2021, after receipt of interest, Flynn Company sold 40 of the bonds for $38,500.

Instructions

Prepare the journal entries to record the transactions described above.

Solution