Question

Prepare Natura Co.’s journal entries to record the following transactions involving its short-term investments in held-to-maturity debt securities, all of which occurred during the current year. a. On June 15, paid $120,000 cash to purchase Remed’s 90-day short-term debt securities ($120,000 principal), dated June 15, that pay 5% interest. b. On September 16, received a check from Remed in payment of the principal and 90 days' interest on the debt securities purchased in transaction a. (Use 360 days in a year. Do not round your intermediate calculations.)

Answer 1

Answer: The answer has been attached below.

Step-by-step explanation:

A journal entry is the record of the business transactions in an accounting books of a business. It is the first step in accounting cycle. The journal details all the financial transactions of a business. The accounts are either recorded in the credit or the debit side of accountings.

The calculation has been attached. Kindly note that the interest was gotten thus:

= 120,000 × 5% × 90/360

= 120,000 × 0.05 × 0.25

= 1500

The journal entry for the whole transactions has been attached.