After issuing bonds in Chapter 15 , Kerr Consulting Corporation has some excess cash on hand. Alex Kerr, the Corporation's major shareholder, intends to invest some of the cash for different time periods to get better returns than from the bank and to have cash available when needed to expand the business into a new market. Assume Kerr Consulting
Corporation completed the following investment transactions:
2015 Apr. 15 The business purchased 300 common shares of Canadian Tire Corporation, Limited for $74.00 per share. Alex Kerr intends to hold this investment for less than a year. He thinks the share value will increase and knows Kerr Consulting will need the cash for operations in less than a year.
Jun. 2 Purchased 2,000 of the 6,000 common shares of Landers Consulting Ltd. at a cost of $40,000. Landers Consulting is a company formed by a colleague of Kerr, so Kerr hopes the investment will lead to future business opportunities for Kerr Consulting.
15 Purchased $10,000 of 6-percent, four-year bonds of Consulting Suppliers Inc. at 115. Kerr intends to hold these to maturity since the effective interest rate is still better than other investments he assessed.
Jul. 1 Received the quarterly cash dividend of $0.05 per share on the Canadian Tire investment.
Dec. 10 Received an annual dividend of $0.50 per share from Landers Consulting Ltd. Also received word that at November 30, Landers' year end, net income was $60,000.
15 Received semiannual interest of $300 on the Consulting Suppliers Inc. bonds. Amortized the premium using the straight-line method.
Required
1. Record the transactions in the general journal of Kerr Consulting Corporation. Disregard any commissions on purchases and sales of investments.
2. Post entries to the Investment in Landers Consulting Ltd. Common Shares T-account. Determine its balance at December 10, 2015, after the transaction shown on that date.