Dristol Company acquired $56,000 Reynolds Company, 4.5% bonds on April 1, 2012, at par value. Interest is paid semiannually on April 1 and October 1. On October 1, 2012,
Dristol sold $20,000 of the bonds for 99.
Journalize entries to record the following:
a. The initial acquisition of the bonds on April 1.
b. The semiannual interest received on October 1.
c. The sale of the bonds on October 1.
d. The accrual of $637 interest on December 31, 2012.

a. 2012

Apr. 1 Investments-Reynolds Co. Bonds............ 56,000

Cash.................................................................. 56,000

b. 2012

Oct. 1 Cash............................................................... 1,260

Interest Revenue............................................... 1,260

$56,000 × 4.5% × 6/12.

c. 2012

Oct. 1 Cash........................................................... 19,800*

Loss on Sale of Investments............................. 200

Investments-Reynolds Corp. Bonds.............. 20,000

*$20,000 × 99%

d. 2012

Dec. 31 Interest Receivable........................................... 637

Interest Revenue............................................... 637

Accrued interest, $56,000 × 4.5%
× 91/360.