Question

Coronado Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions. Feb. 1, 2017 Sharapova Company common stock, $80 par, 160 shares $38,600 April 1 U.S. government bonds, 12%, due April 1, 2027, interest payable April 1 and October 1, 108 bonds of $1,000 par each 108,000 July 1 McGrath Company 12% bonds, par $48,600, dated March 1, 2017, purchased at 104 plus accrued interest, interest payable annually on March 1, due March 1, 2037 52,488 Prepare entries necessary to classify the amounts into proper accounts, assuming that all the securities are classified as available-for-sale. (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 enter 0 for the amounts.) Account Titles and Explanation Debit Credit Debt Investments Equity Investments Interest Revenue Investment SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Prepare the entry to record the accrued interest and the amortization of premium on December 31, 2017, using the straight-line method. (Round answers to 0 decimal places, e.g. 2,500. 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 enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2017 Interest Receivable Debt Investments Interest Revenue SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT The fair values of the investments on December 31, 2017, were: Sharapova Company common stock $32,400 U.S. government bonds 136,200 McGrath Company bonds 53,600 What entry, if any, would you recommend be made? (Round answers to 0 decimal places, e.g. 2,500. 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 enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2017 Fair Value Adjustment Unrealized Holding Gain or Loss - Equity (Entry for debt investment) Unrealized Holding Gain or Loss - Income Fair Value Adjustment (Entry for equity investment) SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT The U.S. government bonds were sold on July 1, 2018, for $129,200 plus accrued interest. Give the proper entry. (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 enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jul. 1, 2018 Cash Debt Investments Interest Revenue Gain on Sale of Investments

Answer 1