Fleet Inc. is an athletic footware company that began operations on January 1, 2012. The following transactions
Question:
2012
Mar. 1 Purchased $36,000 of Madison Co. 5%, 10-year bonds at face value plus accrued interest of $150. The bonds pay interest semiannually on February 1 and August 1.
Apr. 16 Purchased $45,000 of Westville 4%, 15-year bonds at face value plus accrued interest of $75. The bonds pay interest semiannually on April 1 and October 1.
Aug. 1 Received semiannual interest on the Madison Co. bonds.
Sept. 1 Sold $12,000 of Madison Co. bonds at 98 plus accrued interest of $50.
Oct. 1 Received semiannual interest on Westville bonds.
Dec. 31. Accrued $500 interest on Madison Co. bonds.
31. Accrued $450 interest on Westville bonds.
2013
Feb. 1 Received semiannual interest on the Madison Co. bonds.
Apr. 1 Received semiannual interest on the Westville bonds.
Instructions
1. Journalize the entries to record these transactions.
2. If the bond portfolio was classified as available-for-sale, what impact would this have on financial statement disclosure?
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Related Book For
Financial and Managerial Accounting
ISBN: 978-0538480895
11th Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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