1. The following journal entries will be prepared to record the given transactions: | |||
Date | Account Titles and Explanation | Debit | Credit |
Aug. 2 | Debt Investments - Trading | 10000 | |
Cash | 10000 | ||
Sept. 7 | Debt Investments - Trading | 35000 | |
Cash | 35000 | ||
Sept. 12 | Debt Investments - Trading | 20000 | |
Cash | 20000 | ||
Oct. 21 | Cash | 2100 | |
Debt Investments - Trading | 2000 | ||
Gain on Sale of Investments | 100 | ||
Oct. 23 | Cash | 15400 | |
Debt Investments - Trading | 15000 | ||
Gain on Sale of Investments | 400 | ||
Nov. 1 | Debt Investments - Trading | 40000 | |
Cash | 40000 | ||
Dec. 10 | Cash | 18000 | |
Loss on Sale of investments | 2000 | ||
Debt Investments - Trading | 20000 |
2. The following table will be prepared to compare the year-end cost and fair values | |||
Security | Cost | Fair value | Difference |
Verizon bonds | 8000 | 8500 | 500 |
Apple bonds | 20000 | 22000 | 2000 |
Walmart bonds | 40000 | 39000 | -1000 |
Fair value adjustment | 1500 |
3. The following adjusting entry will be prepared as the year-end to record the fair value adjustment: | |||
Date | Account Titles and Explanation | Debit | Credit |
Dec. 31 | Trading Securities fair value adjustment | 1500 | |
Unrealized gain or loss | 1500 |
Kirkland Company had no trading debt securities prior to this year. Problem 15-1A Recording and adjusting...
Problem 15-1A Recording and adjusting trading debt securities LO P1 Kirkland Company had no trading debt securities prior to this year. It had the following transactions this year involving trading debt securities. Aug. Sept. Oct. 2 Purchased Verizon bonds for $10,000. 7 Purchased Apple bonds for $35,000. 12 Purchased Mastercard bonds for $20,000. 21 Sold some of its Verizon bonds that had cost $2,000 for $2,100 cash. 23 Sold some of its Apple bonds that had cost $15,000 for $15,...
Kirkland Company had no trading debt securities prior to this year. It had the following transactions this year involving trading debt securities. Aug. 2 Purchased Verizon bonds for $18,000. Sept. 7 Purchased Apple bonds for $43,000. 12 Purchased Mastercard bonds for $28,000. Oct. 21 Sold some of its Verizon bonds that had cost $2,400 for $2,500 cash. 23 Sold some of its Apple bonds that had cost $23,000 for $23,400 cash. Nov. 1 Purchased Walmart bonds for $48,000. Dec. 10...
Kirkland Company had no trading debt securities prior to this year. It had the following transactions this year involving trading debt securities. Aug. 2 Purchased Verizon bonds for $20,000. Sept. 7 Purchased Apple bonds for $45,000. 12 Purchased Mastercard bonds for $30,000. Oct. 21 Sold some of its Verizon bonds that had cost $2,500 for $2,600 cash. 23 Sold some of its Apple bonds that had cost $25,000 for $25,400 cash. Nov. 1 Purchased Walmart bonds for $50,000. Dec. 10...
Accounting for Debt Securities—Trading Gressens Company had the following transactions and adjustments related to a bond investment: 2016 Oct. Purchased $500,000 face value of Skyline, Inc.'s 7 percent bonds at 97 plus a brokerage commission of $1,000. The bonds pay interest on September 30 and March 31 and mature in 20 years. Gressens 1 expects to sell the bonds in the near future. Dec. 31 Made the adjusting entry to record interest earned on investment in the Skyline bonds. Dec....
Kitty Company began operations in the current year and acquired short-term debt investments in trading securities. The year-end cost and fair values for its portfolio of these debt investments follow Portfolio of Trading Securities (thousands) Tesla Bonds Nike Bonds Tord Bonds Cost Fair Value $12 Prepare journal entries to record the December 31 year-end fair value adjustment for the above debt securities. (Enter your answers in thousands of dollars.) View transaction list Journal entry worksheet Record the year-end adjustment to...
Required information Problem 15-2A Recording, adjusting, and reporting available-for-sale debt securities LO P3 [The following information applies to the questions displayed below.] Mead Inc. began operations in Year 1, following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 Jan. 20 Purchased Johnson & Johnson bonds for $28,500. Feb. 9 Purchased notes of Sony for $62,640. June 12 Purchased bonds of Mattel for $48,500. Dec. 31 Fair values for debt in the...
Brooks Co. purchases debt investments as trading securities at a cost of $66,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $72,000. 1. Prepare the December 27 entry for the purchase of debt investments. 2. & 3. Prepare the December 31 year-end fair value adjusting entry for the trading securities' portfolio and the January 3 entry when Brooks sells a portion of its trading securities...
Kitty Company began operations in the current year and acquired short-term debt investments in trading securities. The year-end cost and fair values for its portfolio of these debt investments follow. Portfolio of Trading Securities Tesla Ronds Nike Bonds Ford Bonds Coat $17,700 27.600 6.900 Tair Value $13,275 28,980 5.520 Prepare journal entry to record the December 31 year-end fair value adjustment for the debt securities View transaction list Journal entry worksheet Record the year-end adjustment to fair value, If any....
Exercise 15-2 Accounting for debt investments classified as trading LO P1 Brooks Co. purchases debt investments as trading securities at a cost of $54,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $69,000. 1. Prepare the December 27 entry for the purchase of debt investments. 2. & 3. Prepare the December 31 year-end fair value adjusting entry for the trading securities' portfolio and the January...
Help Suve & Brooks Co. purchases debt investments as trading securities at a cost of $51,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $66.000 1. Prepare the December 27 entry for the purchase of debt investments 2. & 3. Prepare the December 31 year-end fair value adjusting entry for the trading securities' portfolio and the January 3 entry when Brooks sells a portion of...