Prepare journal entries to record the following transactions involving the short-term securities investments of Natura Co., all of which occurred during year 2013. a. On June 15, paid $156,000 cash to purchase Remedy's 90-day short-term debt securities ($156,000 principal), dated June 15, that pay 9% interest (categorized as held-to-maturity securities).

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Business

Ernesto Mckenzie

31 August, 12:49

Prepare journal entries to record the following transactions involving the short-term securities investments of Natura Co., all of which occurred during year 2013. a. On June 15, paid $156,000 cash to purchase Remedy's 90-day short-term debt securities ($156,000 principal), dated June 15, that pay 9% interest (categorized as held-to-maturity securities).

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Edwin Soto · Answer 1

The journal entry is shown below;

Short term investment A/c Dr $156,000

To Cash $156,000

(Being the cash is paid to purchase the short term investment)

For recording this transaction we debited the short term investment and credited the cash as cash it is outflow and at the same time it increases the asset so it would be debited