Homework Answers
Solution:
Journal Entries:
| S.No | Particulars | Debit ($) | Credit ($) |
| a. | Debt investment - Available for sale | $68,794 | |
| Cash | $68,794 | ||
| (To record purchase of investment) | |||
| b. | Cash | $8,140 | |
| Debt investment - Available for sale | $803 | ||
| Interest revenue | $8,943 | ||
| (To record revenue received) | |||
| c. | Fair value Adjustment (Available for sale) (70,300-(68,794+803)) |
$703 | |
| Unrealized Holding Gain or Loss | $703 |
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Brief Exercise 17-2 Culver Company purchased, on January 1, 2017, as an available-for-sale security, $74,000 of...
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Sunland Company purchased, on January 1, 2020, as an
available-for-sale security, $70,000 of the 9%, 5-year bonds of
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return.
Prepare Sunland’s journal entries for (a) the purchase of the
investment, (b) the receipt of annual interest and discount
amortization, and (c) the year-end fair value adjustment. (Assume a
zero balance in the Fair Value Adjustment account.) The bonds have
a year-end fair value of $66,500. (Round answers to 0
decimal places, e.g....
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return.
Prepare Carla’s journal entries for (a) the purchase of the
investment, and (b) the receipt of annual interest and discount
amortization. Assume effective-interest amortization is used.
(Round answers to 0 decimal places, e.g. 1,225. Credit
account titles are automatically indented when amount is entered.
Do not indent manually. If no entry is required,...
Question 11 Wildhorse Company purchased, on January 1, 2017, as a held-to-maturity investment, $68,000 of the...
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Sunland Company purchased, on January 1, 2020, as an
available-for-sale security, $70,000 of the 9%, 5-year bonds of
Chester Corporation for $64,826, which provides an 11%
return.
Prepare Sunland’s journal entries for (a) the purchase of the
investment, (b) the receipt of annual interest and discount
amortization, and (c) the year-end fair value adjustment. (Assume a
zero balance in the Fair Value Adjustment account.) The bonds have
a year-end fair value of $66,500. (Round answers to 0
decimal places, e.g....
Brief Exercise 17-1 Monty Company purchased, on January 1, 2017, as a held-to-maturity investment, $85,000 of the 10%, 5- year bonds of Chester Corporation for $78,873, which provides an 12% return. Prepare Monty's journal entries for (a) the purchase of the investment, and (b) the receipt of annual interest and discount amortization. Assume effective-interest amortization is used. (Round answers to 0 decimal places, e.g. 1,225. Credit account titles are automatically indented when amount is entered. Do not indent manually. If...
CALORADOR PRINR VRSON Brief Exercise 17-1 DACK NEXT Stellar Company purchased, on January 1, 2017, as a held-to-maturity investment, $73,000 of the t, S-year bonds of Chester Corporation for $67,465, which provides an 10% retum Prepare Stelar's journal entries for (a) the purchase of the investment, and (b) the receipt of annual interest and discount amartization. Assume effective-interest amertization is used. (Round answers to o decmal places, eg. 1,225. Credit account titles are automatically indented when amount is entered. Do...
Carla Company purchased, on January 1, 2017, as a
held-to-maturity investment, $66,000 of the 8%, 5-year bonds of
Chester Corporation for $60,996, which provides an 10%
return.
Prepare Carla’s journal entries for (a) the purchase of the
investment, and (b) the receipt of annual interest and discount
amortization. Assume effective-interest amortization is used.
(Round answers to 0 decimal places, e.g. 1,225. Credit
account titles are automatically indented when amount is entered.
Do not indent manually. If no entry is required,...
Question 11 Wildhorse Company purchased, on January 1, 2017, as a held-to-maturity investment, $68,000 of the 10%, 5-year bonds of Chester Corporation for $63,098, which provides an 12% return. Prepare Wildhorse's journal entries for (a) the purchase of the investment, and (b) the receipt of annual interest and discount amortization. Assume effective-interest amortization is used. (Round answers to 0 decimal places, e.g. 1,225. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry...
Brief Exercise 12-2 On January 1, 2018, Marshall Ltd. purchased $221,000 of 9 , 10-year bonds at face value (100) with the intention of selling the bonds early the next year. Interest is received semi-annually only 1 and January 1. At December 31, 2018, which is the company's fiscal year end, the bonds were trading in the market at 95 (this means 95% of maturity value) Using the fair value through profit or loss model, prepare the journal entry to...
Exercise 17-9 At December 31, 2017, the available-for-sale debt portfolio for Vaughn, Inc. is as follows. Unrealized Gain (Loss) Security Cost Fair Value $36,750 $31,500 26,250 29,400 48,300 53,550 Total $111,300 $114,450 Previous fair value adjustment balance-Dr. Fair value adjustment-Dr. $(5,250) 3,150 5,250 3,150 840 $2,310 On January 20, 2018, Vaughn, Inc. sold security A for $31,710. The sale proceeds are net of brokerage fees. Prepare the adjusting entry at December 31, 2017, to report the portfolio at fair value....
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