Referring to information in Brief Exercise 14-18, assume thatHenry Inc. sold its holdings of Container Corpora-tion bonds onJuly 2, 2020, for $4,800. Record the sale of the debt investment,eliminating the Fair Value Adjust-ment account upon sale.
brief 14-18 Henry Inc. purchased $5,000 of ContainerCorporation’s 5% bonds at par. The purchase is made on January1,
2020, and the investment is classified as a trading security. AtJune 30, 2020, Henry Inc. received semiannual
interest of $125, and the fair value of the bonds was $4,800.Prepare Henry’s journal entries for (a) the purchase
of the investment, (b) the interest received, and (c) the fairvalue adjustment.
