Accounting for Debt Securities—Available-for-Sale Hilo Company had the following transactions and adjustments related to a bond...
Accounting for Debt
Securities—Available-for-Sale
Hilo Company had the following transactions and adjustments related
to a bond investment:
| 2019 | |
| Jan. 1 | Purchased $800,000 face value of Cynad, Inc.’s 9 percent bonds at 99 plus a brokerage commission of $1,400. The bonds pay interest on June 30 and December 31 and mature in 20 years. Hilo does not expect to sell the bonds in the near future, nor does it intend to hold the bonds to maturity. |
| June 30 | Received the semiannual interest payment on the Cynad bonds and amortized the bond discount for six months. Hilo uses the straight‑line method to amortize bond discounts and premiums. |
| Dec. 31 | Received the semiannual interest payment on the Cynad bonds and amortized the bond discount for six months. |
| Dec. 31 | Made the adjusting entry to record the current fair value of the Cynad bonds. At December 31, the market value of the Cynad bonds was $790,000. |
| 2020 | |
| June 30 | Received the semiannual interest payment on the Cynad bonds and amortized the bond discount for six months. |
| July 1 | Sold the Cynad bond investment for $792,500 cash. |
| Dec. 31 | Made the adjusting entry to eliminate balances from the Fair Value Adjustment to Bond Investment account and the Unrealized Gain/Loss on Investments (Equity) account. |
Record the transactions and adjustments of Hilo Company using journal entries.
| General Journal | |||
|---|---|---|---|
| Date | Description | Debit | Credit |
| 1/1/2019 | Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | ||
| Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | |||
| To record purchase of debt securities. | |||
| 6/30/2019 | Cash | ||
| Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | |||
| Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | |||
| To record receipt of interest earned on debt securities. | |||
| 12/31/2019 | Cash | ||
| Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | |||
| Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | |||
| To record receipt of interest earned on debt securities. | |||
| 12/31/2019 | Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | ||
| Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | |||
| To adjust debt securities to year-end fair value. | |||
| 6/30/2020 | Cash | ||
| Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | |||
| Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | |||
| To record receipt of interest and amortization of debt securities. | |||
| 7/1/2020 | Cash | ||
| Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | |||
| Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | |||
| To record sale of debt securities. | |||
| 12/31/2020 | Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | ||
| Bond interest incomeBond interest receivableBond investment-available for sale (Cynad)CashFair value adjustment to bond investmentGain on sale of investmentsLoss on sale of investmentsUnrealized gain/loss on investments (equity) | |||
| To adjust account balances to zero. | |||
PreviousSave AnswersNext
Homework Answers
Request Answer!
We need at least 10 more requests to produce the answer.
0 / 10 have requested this problem solution
The more requests, the faster the answer.
Add Answer to:
Accounting for Debt
Securities—Available-for-Sale
Hilo Company had the following transactions and adjustments related
to a bond...
Accounting for Debt Securities–Available-for-Sale Hilyn Company had the following transactions and adjustments related to a bond...
Accounting for Debt Securities–Available-for-Sale Hilyn Company had the following transactions and adjustments related to a bond investment: 2016 Jan. Purchased $800,000 face value of Cynad, Inc.'s 9 percent bonds at 99 plus a brokerage commission of $1,400. The bonds pay interest on June 30 and December 31 and mature in 15 years. Hilyn does 1 not expect to sell the bonds in the near future, nor does it intend to hold the bonds to maturity. June 30 Received the semiannual...
Accounting for Debt Securities—Trading Gressens Company had the following transactions and adjustments related to a bon...
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....
Accounting for Debt Securities- Held-to-Maturity Kurl Company had the following transactuons and adjustments related to a...
Accounting for Debt Securities- Held-to-Maturity
Kurl Company had the following transactuons and adjustments
related to a bond investment:
Accounting for Debt Securities-Held-to-Maturity Kurl Company had the following transactions and adjustments related to a bond investment: 2016 Jan. Purchased $600,000 face value of Sphere, Inc.'s 9 percent bonds at 102 plus a brokerage commission of $900. The bonds pay interest on June 30 1 and December 31 and mature in 10 years. Kuri expects to hold the bonds to maturity. June...
At the beginning of 2019, Ace Company had the following portfolio of investments in available-for-sale debt...
At the beginning of 2019, Ace Company had the following
portfolio of investments in available-for-sale debt securities (all
of which were acquired at par value):
Security
Cost
1/1/19 Fair Value
A
$35,000
$44,000
B
53,000
50,000
Totals
$88,000
$94,000
During 2019, the following transactions occurred:
Transactions:
May
3
Purchased C debt securities at their par value for
$50,000.
July
1
Sold all of the A securities for $44,000 plus interest of
$1,000.
Dec.
31
Received interest of $1,000 on the...
At the end of 2018, Terry Company prepared the following schedule of investments in available-for-sale debt...
At the end of 2018, Terry Company prepared the following
schedule of investments in available-for-sale debt securities (all
of which were acquired at par value):
Company
Amortized Cost
12/31/18 Fair Value
Cumulative Change in Fair Value
Morgan Company
$35,000
$34,200
$(800)
Nance Company
60,000
63,200
3,200
Totals
$95,000
$97,400
$2,400
During 2019, the following transactions occurred:
July 1
Purchased Oscar Company debt securities with a par value of
100,000 for $97,000. The securities carry an annual interest rate
of 10%,...
On December 31, 2018, Marsh Company held Xenon Company bonds in its portfolio of available-for-sale securities....
On December 31, 2018, Marsh Company held Xenon Company bonds in
its portfolio of available-for-sale securities. The bonds have a
par value of $14,000, carry a 10% annual interest rate, mature in
2025, and had originally been purchased at par. The market value of
the bonds at December 31, 2018 was $12,000. The December 31, 2018,
balance sheet showed the following:
Marsh Company
Partial Balance Sheet
December 31, 2018
1
Assets
2
Investment in Available-for-Sale Securities
$14,000.00
3
Less: Allowance...
Required information Problem 15-2A Recording, adjusting, and reporting available-for-sale debt securities LO P3 [The following information...
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...
HW 17-7-Debt Securities AS CORRECTED Presented below is an amortization schedue related to the Orlando Magic's...
HW 17-7-Debt Securities AS CORRECTED Presented below is an amortization schedue related to the Orlando Magic's 5 year, $200,000 bond with a 5% interest rate and a 5% yield, purchased on December 31, 2018 for $191,575. Bond Discount Carrying Amount Date Cash Received Interest Revenue Amortization of Bond 12/31/2018 191,575 12/31/2019 10,000 11,495 1,495 193,070 12/31/2020 10,000 11,584 1,584 194,654 12/31/2021 10,000 11,679 1,679 196,333 12/31/2022 10,000 11,780 1,780 198,113 12/31/2023 10,000 11,887 1,887 200,000 Instructions (a) Prepare the journal...
5. On December 31, 2018, Marsh Company held Xenon Company bonds in its portfolio of available-for-sale...
5. On December 31, 2018, Marsh Company held Xenon Company bonds
in its portfolio of available-for-sale securities. The bonds have a
par value of $14,000, carry a 10% annual interest rate, mature in
2025, and had originally been purchased at par. The market value of
the bonds at December 31, 2018 was $12,000. The December 31, 2018,
balance sheet showed the following:
Marsh Company
Partial Balance Sheet
December 31, 2018
1
Assets
2
Investment in Available-for-Sale Securities
$14,000.00
3
Less:...
Use the following information on a company's investments in debt securities. The company's accounting year ends...
Use the following information on a company's investments in debt securities. The company's accounting year ends December 31. Investment Date of Acquisition Cost Fair Value 12/31/19 Date Sold Selling Price Colt Company bonds 9/20/19 $38,000 $37,000 2/10/20 $42,000 Dana Company bonds 10/2/19 14,000 14,200 1/17/20 13,000 1. If the above debt investments are categorized as trading securities, what amount is reported for gain or loss on securities in 2019 income? 2. If the above debt investments are categorized as trading...
Accounting for Debt Securities–Available-for-Sale Hilyn Company had the following transactions and adjustments related to a bond investment: 2016 Jan. Purchased $800,000 face value of Cynad, Inc.'s 9 percent bonds at 99 plus a brokerage commission of $1,400. The bonds pay interest on June 30 and December 31 and mature in 15 years. Hilyn does 1 not expect to sell the bonds in the near future, nor does it intend to hold the bonds to maturity. June 30 Received the semiannual...
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....
Accounting for Debt Securities- Held-to-Maturity
Kurl Company had the following transactuons and adjustments
related to a bond investment:
Accounting for Debt Securities-Held-to-Maturity Kurl Company had the following transactions and adjustments related to a bond investment: 2016 Jan. Purchased $600,000 face value of Sphere, Inc.'s 9 percent bonds at 102 plus a brokerage commission of $900. The bonds pay interest on June 30 1 and December 31 and mature in 10 years. Kuri expects to hold the bonds to maturity. June...
At the beginning of 2019, Ace Company had the following
portfolio of investments in available-for-sale debt securities (all
of which were acquired at par value):
Security
Cost
1/1/19 Fair Value
A
$35,000
$44,000
B
53,000
50,000
Totals
$88,000
$94,000
During 2019, the following transactions occurred:
Transactions:
May
3
Purchased C debt securities at their par value for
$50,000.
July
1
Sold all of the A securities for $44,000 plus interest of
$1,000.
Dec.
31
Received interest of $1,000 on the...
At the end of 2018, Terry Company prepared the following
schedule of investments in available-for-sale debt securities (all
of which were acquired at par value):
Company
Amortized Cost
12/31/18 Fair Value
Cumulative Change in Fair Value
Morgan Company
$35,000
$34,200
$(800)
Nance Company
60,000
63,200
3,200
Totals
$95,000
$97,400
$2,400
During 2019, the following transactions occurred:
July 1
Purchased Oscar Company debt securities with a par value of
100,000 for $97,000. The securities carry an annual interest rate
of 10%,...
On December 31, 2018, Marsh Company held Xenon Company bonds in
its portfolio of available-for-sale securities. The bonds have a
par value of $14,000, carry a 10% annual interest rate, mature in
2025, and had originally been purchased at par. The market value of
the bonds at December 31, 2018 was $12,000. The December 31, 2018,
balance sheet showed the following:
Marsh Company
Partial Balance Sheet
December 31, 2018
1
Assets
2
Investment in Available-for-Sale Securities
$14,000.00
3
Less: Allowance...
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...
HW 17-7-Debt Securities AS CORRECTED Presented below is an amortization schedue related to the Orlando Magic's 5 year, $200,000 bond with a 5% interest rate and a 5% yield, purchased on December 31, 2018 for $191,575. Bond Discount Carrying Amount Date Cash Received Interest Revenue Amortization of Bond 12/31/2018 191,575 12/31/2019 10,000 11,495 1,495 193,070 12/31/2020 10,000 11,584 1,584 194,654 12/31/2021 10,000 11,679 1,679 196,333 12/31/2022 10,000 11,780 1,780 198,113 12/31/2023 10,000 11,887 1,887 200,000 Instructions (a) Prepare the journal...
5. On December 31, 2018, Marsh Company held Xenon Company bonds
in its portfolio of available-for-sale securities. The bonds have a
par value of $14,000, carry a 10% annual interest rate, mature in
2025, and had originally been purchased at par. The market value of
the bonds at December 31, 2018 was $12,000. The December 31, 2018,
balance sheet showed the following:
Marsh Company
Partial Balance Sheet
December 31, 2018
1
Assets
2
Investment in Available-for-Sale Securities
$14,000.00
3
Less:...
Most questions answered within 3 hours.
-
Please help me with this problem below
What is wrong with the following code?
if income...
asked 8 minutes ago -
The following information for the past year is available from
Thinnews Co., a company that uses...
asked 11 minutes ago -
Suppose you work for Allstate, and insurance company and the
data shows the following for auto...
asked 11 minutes ago -
The fresh fruit market and frozen dinner market are
currently in equilibrium. Fresh fruit is a...
asked 17 minutes ago -
(1 point) Golf-course designers have become concerned that old
courses are becoming obsolete since new technology...
asked 15 minutes ago -
The active retelling of dominant cultural stories is known
preserves which concept?
hegemony
heterodoxy
doxa
myth
asked 18 minutes ago -
1. Which of the following statements is true of money?
It is anything accepted in exchange...
asked 19 minutes ago -
BASED ON THE AIRBNB, ETSY, UBER: GROWING FROM ONE THOUSAND TO
ONE MILLION CUSTOMERS HARVARD CASE:...
asked 45 minutes ago -
Which of these methods cause sterilization?
Autoclaving
Dry heat
Gamma irradiation
Ethylene oxide
A.
Yes
No...
asked 50 minutes ago -
A biologist wishes to estimate the effect of an antibiotic on
the growth of a particular...
asked 58 minutes ago -
O’Deesha Company has the following information available:
Quality engineering of
products
$20,000
Quality training of
employees &n
asked 1 hour ago -
a) Draw two water molecules.
b) Clearly name and label the type of bond that exists...
asked 2 hours ago