Homework Answers
No gain should be included in 2021 income.
Securities held primarily for sale in the near term to generate income on short-term price differences are known as trading securities. Any gain on sale of trading securities is recognized in the year of sale.
Trading securities are recorded at cost price.
Hence, investment in bonds will be shown at cost price of $7,900,000 and no loss will be shown in the income statement.
Option (d) is correct option.
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Sdve A In 2019, Osgood Corporation purchased $7.9 million worth of 10-year municipal bonds at face...
In 2019, Osgood Corporation purchased $8.2 million worth of 10-year municipal bonds at face value. On...
In 2019, Osgood Corporation purchased $8.2 million worth of 10-year municipal bonds at face value. On December 31, 2021, the bonds had a fair value of $3,200,000 and Osgood reclassified the bonds from held-to-maturity to trading securities. Osgood's December 31, 2021, balance sheet and the 2021 income statement would show the following: Income statement loss on investments o jo Investment in bonds (TS) $3,200,000 $3,200,000 $8,200,000 $8,200,000 $5,000,000 $5,000,000
Which option is correct. A, B, C, or D In 2019, Osgood Corporation purchased $6.1 million...
Which option is correct. A, B, C, or D
In 2019, Osgood Corporation purchased $6.1 million worth of 10-year municipal bonds at face value. On December 31, 2021, the bonds had a fair value of $4,300,000 and Osgood reclassified the bonds from held-to-maturity to trading securities. Osgood's December 31, 2021, balance sheet and the 2021 income statement would show the following: Income statement loss on investments 0 $1,800,000 $1,800,000 Investment in bonds (TS) $ 4,300,000 $4,300,000 $6,100,000 $6,100,000 a. b....
On January 1, 2018, Hoosier Company purchased $944,000 of 10% bonds at face value. The bond...
On January 1, 2018, Hoosier Company purchased $944,000 of 10% bonds at face value. The bond market value was $987,000 on December 31, 2018. Required: Prepare the appropriate journal entry on December 31, 2018, to properly value the bonds assuming the bonds are classified as: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Trading securities. Securities available for sale. Held-to-maturity securities.
on January 1,2020, Wildcat company purchased $93,000 of 10% bonds at face value. The bonds pay...
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The following Tarjee Corporation transactions are for bonds that were purchased as a held for trading...
The following Tarjee Corporation transactions are for bonds that were purchased as a held for trading investment for the year ended December 31, 2018: Feb. 1 Purchased $250,000 of Leslye Corporation 3% bonds at 105 (this means 105% of maturity value). Interest is received semi-annually on August 1 and February 1. The bonds mature on February 1, 2020. Aug. 1 Received interest on Leslye bonds. 2 Sold $100,000 of the Leslye bonds at 102. Dec. 31 Accrued interest on the...
On January 1, 2019, Kelly Corporation acquired bonds with a face value of $500,000 for $484,163.65,...
On January 1, 2019, Kelly Corporation acquired bonds with a face
value of $500,000 for $484,163.65, a price that yields a 11%
effective annual interest rate. The bonds carry a 10% stated rate
of interest, pay interest semiannually on June 30 and December 31,
are due December 31, 2022, and are being held to maturity.
Required:
Prepare journal entries to record the purchase of the bonds and
the first two interest receipts using the:
1.
straight-line method of amortization
2....
On January 1, 2019, Kelly Corporation acquired bonds with a face value of $500,000 for $484,163.65,...
On January 1, 2019, Kelly Corporation acquired bonds with a face
value of $500,000 for $484,163.65, a price that yields a 11%
effective annual interest rate. The bonds carry a 10% stated rate
of interest, pay interest semiannually on June 30 and December 31,
are due December 31, 2022, and are being held to maturity.
Required:
Prepare journal entries to record the purchase of the bonds and
the first two interest receipts using the:
1.
straight-line method of amortization
2....
I.1) Dicker Furriers purchased 1,000 bonds of Loose Corporation on January 10, 2020, for $800 per...
I.1) Dicker Furriers purchased 1,000 bonds of Loose Corporation on January 10, 2020, for $800 per bond and classified the investment as securities available-for-sale. Loose's market value was $400 per bond on December 31, 2020, and the decline was due to a noncredit loss. As of December 31, 2021, Dicker still owned the Loose bonds whose market value had declined to $100 per bond. The additional decline is due to a credit loss of $300 per bond. Dicker does not...
The following Vermillion Corporation transactions are for bonds that were purchased as a held for trading...
The following Vermillion Corporation transactions are for bonds
that were purchased as a held for trading investment for the year
ended December 31, 2018:
A) Fill in the blanks below.
B) Show how the investment would be presented on the statement
of financial position at December 31, 2018.
(C) Determine the balance in each of the income statement
accounts that are affected in the transactions above and indicate
how they would be presented on the income statement for the year...
On January 1, 2018, Hoosier Company purchased $918,000 of 10% bonds at face value. The bond...
On January 1, 2018, Hoosier Company purchased $918,000 of 10% bonds at face value. The bond market value was $974,000 on December 31, 2018 Required: Prepare the appropriate journal entry on December 31, 2018, to properly value the bonds assuming the bonds are classified as: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. Trading securities. 2. Securities available for sale. 3. Held-to-maturity securities. View transaction list Journal entry worksheet...
In 2019, Osgood Corporation purchased $8.2 million worth of 10-year municipal bonds at face value. On December 31, 2021, the bonds had a fair value of $3,200,000 and Osgood reclassified the bonds from held-to-maturity to trading securities. Osgood's December 31, 2021, balance sheet and the 2021 income statement would show the following: Income statement loss on investments o jo Investment in bonds (TS) $3,200,000 $3,200,000 $8,200,000 $8,200,000 $5,000,000 $5,000,000
Which option is correct. A, B, C, or D
In 2019, Osgood Corporation purchased $6.1 million worth of 10-year municipal bonds at face value. On December 31, 2021, the bonds had a fair value of $4,300,000 and Osgood reclassified the bonds from held-to-maturity to trading securities. Osgood's December 31, 2021, balance sheet and the 2021 income statement would show the following: Income statement loss on investments 0 $1,800,000 $1,800,000 Investment in bonds (TS) $ 4,300,000 $4,300,000 $6,100,000 $6,100,000 a. b....
The following Tarjee Corporation transactions are for bonds that were purchased as a held for trading investment for the year ended December 31, 2018: Feb. 1 Purchased $250,000 of Leslye Corporation 3% bonds at 105 (this means 105% of maturity value). Interest is received semi-annually on August 1 and February 1. The bonds mature on February 1, 2020. Aug. 1 Received interest on Leslye bonds. 2 Sold $100,000 of the Leslye bonds at 102. Dec. 31 Accrued interest on the...
On January 1, 2019, Kelly Corporation acquired bonds with a face
value of $500,000 for $484,163.65, a price that yields a 11%
effective annual interest rate. The bonds carry a 10% stated rate
of interest, pay interest semiannually on June 30 and December 31,
are due December 31, 2022, and are being held to maturity.
Required:
Prepare journal entries to record the purchase of the bonds and
the first two interest receipts using the:
1.
straight-line method of amortization
2....
On January 1, 2019, Kelly Corporation acquired bonds with a face
value of $500,000 for $484,163.65, a price that yields a 11%
effective annual interest rate. The bonds carry a 10% stated rate
of interest, pay interest semiannually on June 30 and December 31,
are due December 31, 2022, and are being held to maturity.
Required:
Prepare journal entries to record the purchase of the bonds and
the first two interest receipts using the:
1.
straight-line method of amortization
2....
The following Vermillion Corporation transactions are for bonds
that were purchased as a held for trading investment for the year
ended December 31, 2018:
A) Fill in the blanks below.
B) Show how the investment would be presented on the statement
of financial position at December 31, 2018.
(C) Determine the balance in each of the income statement
accounts that are affected in the transactions above and indicate
how they would be presented on the income statement for the year...
On January 1, 2018, Hoosier Company purchased $918,000 of 10% bonds at face value. The bond market value was $974,000 on December 31, 2018 Required: Prepare the appropriate journal entry on December 31, 2018, to properly value the bonds assuming the bonds are classified as: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. Trading securities. 2. Securities available for sale. 3. Held-to-maturity securities. View transaction list Journal entry worksheet...
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