Answer:
Dr Cash 30
Cr Interest revenue 30
Explanation:
Preparation of te entry for the receipt of interest on January 1, 2015 for Brenner Company
Since we were told that On January 1, 2014, Brenner Company was said to have purchased at a face value, the amount of $1,000 with 6% bond that pays the interest in January 1 this means we have to record the transaction by Debiting Cash with $30 and Crediting Interest revenue with the same amount. The $30 is been calculated as:
1,000 *.06 *1/2 =$30
Therefore the entry for the receipt of interest on January 1, 2015 is:
Dr Cash 30
Cr Interest revenue 30
