Homework Answers
| (a) | Date | Account Titles and Explanation | Debit | Credit |
| Dec 31, 2017 | Fair Value Adjustment | $648,000 | ||
| Unrealized Holding Gain or Loss- Equity | $648,000 | |||
| (To record fair value adjustment) ($9,648,000 - $9,000,000) | ||||
| (b) | Date | Account Titles and Explanation | Debit | Credit |
| Dec 31, 2017 | Fair Value Adjustment | $648,000 | ||
| Unrealized Holding Gain or Loss- Income | $648,000 | |||
| (To record fair value adjustment) ($9,648,000 - $9,000,000) | ||||
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Your answer is partially correct. Try again. Crane Company invests $9,000,000 in 4% fixed rate corporate...
At December 31, 2017, the available-for-sale debt portfolio for Skysong, Inc. is as follows. Unrealized Gain...
At December 31, 2017, the available-for-sale debt portfolio for Skysong, Inc. is as follows. Unrealized Gain (Loss) Security Cost Fair Value $27,000 25,200 45,900 $98,100 $(4,500) 2,700 4,500 $31,500 22,500 41,400 Total $95,400 Previous fair value adjustment balance-Dr. Fair value adjustment-Dr. 2,700 720 $1,980 On January 20, 2018, Skysong, Inc. sold security A for $27,180. The sale proceeds are net of brokerage fees. (a) Your answer is correct. Prepare the adjusting entry at December 31, 2017, to report the portfolio...
On January 1, 2020, Metlock Corporation purchased 40% of the common shares of Bonita Company for...
On January 1, 2020, Metlock Corporation purchased 40% of the common shares of Bonita Company for $173,000. During the year, Bonita earned net income of $91,000 and paid dividends of $22,750. Prepare the entries for Metlock to record the purchase and any additional entries related to this investment in Bonita Company in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and...
Your answer is partially correct. Try again. On January 1, 2017, Cheyenne Company purchased 11% bonds,...
Your answer is partially correct. Try again. On January 1, 2017, Cheyenne Company purchased 11% bonds, having a maturity value of $301,000, for $324,415.24. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. Cheyenne Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December...
Monty Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31,...
Monty Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,310,000 for 52,400 shares. Kulikowski Inc. declared and paid an $0.85 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $701,000 for 2021. The fair value of Kulikowski's stock was $28 per share at December 31, 2021. Assume that the security is a trading security. Prepare the journal entries for Monty...
Sweet Corp. carries an account in its general ledger called Investments, which contained debits for investment...
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veet Corp. carries an account in its general ledger called Investments, which contained debits for investment...
veet Corp. carries an account in its general ledger called Investments, which contained debits for investment archases, and no credits, with the following descriptions. $38,500 eb. 1, 2017 April 1 Sharapova Company common stock, $80 par, 160 shares U.S. government bonds, 12%, due April 1, 2027, interest payable April 1 and October 1, 108 bonds of $1,000 par each McGrath Company 12% bonds, par $53,300, dated March 1, 2017, purchased at 104 plus accrued interest, interest payable annually on March...
Marin Company invests $11,100,000 in 5% fixed rate corporate bonds on January 1, 2017. All the...
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Exercise 17-7 Your answer is partially correct. Try again. On December 21, 2013, Bucky Katt Company...
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Your answer is partially correct. Try again. Concord Company has an investment in 7%, 13-year bonds...
Your answer is partially correct. Try again. Concord Company has an investment in 7%, 13-year bonds of Soto Company. The investment was originally purchased at par for $280 in 2016 and it is accounted for at amortized cost. Early in 2017, Concord recorded an impairment on the Soto investment due to Soto's financial distress. At that time, the present value of the cash flows discounted using the original effective interest rate was $252, and the present value of the cash...
Exercise 17-2 Your answer is partially correct. Try again. On January 1, 2017, Sheffield Company purchased...
Exercise 17-2 Your answer is partially correct. Try again. On January 1, 2017, Sheffield Company purchased at par 6% bonds having a maturity value of $310,000. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. The bonds are classified in the held-to-maturity category. (a) Prepare the journal entry at the date of the bond purchase (b) Prepare the journal entry to record the interest revenue on December 31, 2017...
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On January 1, 2020, Metlock Corporation purchased 40% of the common shares of Bonita Company for $173,000. During the year, Bonita earned net income of $91,000 and paid dividends of $22,750. Prepare the entries for Metlock to record the purchase and any additional entries related to this investment in Bonita Company in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and...
Your answer is partially correct. Try again. On January 1, 2017, Cheyenne Company purchased 11% bonds, having a maturity value of $301,000, for $324,415.24. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. Cheyenne Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December...
Monty Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,310,000 for 52,400 shares. Kulikowski Inc. declared and paid an $0.85 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $701,000 for 2021. The fair value of Kulikowski's stock was $28 per share at December 31, 2021. Assume that the security is a trading security. Prepare the journal entries for Monty...
Sweet Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions. $38,500 Sharapova Company common stock, $80 par, 160 shares Feb. 1, 2017 U.S. government bonds, 12%, due April 1, 2027, interest payable April 1 and October 1, 108 bonds of $1,000 par each April 1 108,000 McGrath Company 12% bonds, par $53,300, dated March 1, 2017, purchased at 104 plus accrued interest, interest payable annually on...
veet Corp. carries an account in its general ledger called Investments, which contained debits for investment archases, and no credits, with the following descriptions. $38,500 eb. 1, 2017 April 1 Sharapova Company common stock, $80 par, 160 shares U.S. government bonds, 12%, due April 1, 2027, interest payable April 1 and October 1, 108 bonds of $1,000 par each McGrath Company 12% bonds, par $53,300, dated March 1, 2017, purchased at 104 plus accrued interest, interest payable annually on March...
Marin Company invests $11,100,000 in 5% fixed rate corporate bonds on January 1, 2017. All the bonds are classified as available-for-sale and are purchased at par. At year-end, market interest rates have declined, and the fair value of the bonds is now $11,629,000. Interest is paid on January 1. Prepare journal entries for Marin Company to (a) record the transactions related to these bonds in 2017, assuming Marin does not elect the fair option; and (b) record the transactions related...
Exercise 17-7 Your answer is partially correct. Try again. On December 21, 2013, Bucky Katt Company provided you with the following information regarding its trading securities. December 31, 2013 Unrealized Gain Fair Value Cost Investments (Trading) (Loss) $(1,000) (1,000) $19,660 $20,660 Clemson Corp. stock 10,520 11,520 Colorado Co. stock 670 21,330 20,660 Buffaloes Co. stock (1,330) $51,510 $52,840 Total of portfolio Previous fair value adjustment balance $(1,330) Fair value adjustment-Cr. During 2014, Colorado Company stock was sold for $10,930. The...
Your answer is partially correct. Try again. Concord Company has an investment in 7%, 13-year bonds of Soto Company. The investment was originally purchased at par for $280 in 2016 and it is accounted for at amortized cost. Early in 2017, Concord recorded an impairment on the Soto investment due to Soto's financial distress. At that time, the present value of the cash flows discounted using the original effective interest rate was $252, and the present value of the cash...
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