4 question set

Project Description:

this is a 4 question set. the attached file will be number 4. they are labeled 1-3.

1. capper hardware purchased $120,000 of 3%, 10-year travolini corporation bonds on april 3, 2014. the bonds were purchased directly from the corporation, at their face amount plus accrued interest. the bonds pay quarterly interest on january 1, march 1, june 1, and september 1. on september 1, 2014, capper hardware sold $25,000 of the travolini corporation bonds at 95 plus $100 accrued interest, less a $125 brokerage commission. provide journal entries for the following:

a. the purchase of the bonds on april 3rd, plus 75 days of accrued interest.

b. quarterly interest on june 1.

c. sale of the bonds on september 1.

d. adjusting entry for accrued interest of $300 on december 31, 2014.



2. on february 9, 2014, nelson company purchased 125, 000 shares of duke energy corporation directly from its founders. nelson paid $45 per share to duke energy, who has 500,000 outstanding shares including what nelson purchased. on june 30, duke energy paid $450,000 in total dividends to its shareholders. on december 31, 2014, duke energy reported $1,350,000 net income for the year. nelson uses the equity method in accounting to calculate its investment in duke energy.

a. create the journal entries for nelson company’s transactions involving the investment in duke energy corporation during the year of 2014.

b. calculate the december 31, 2014 balance of the investment in the duke energy corporation stock account. show all your work!


3. carmen, incorporated began business on january 1 2013. the company spent a total of $167,100 on the following purchases of available-for-sale securities: 2200 shares from kenton appliances for $72,600, 600 shares from laymont company for $12,600, and 3150 shares from fairway travels for $81,900.

as of december 31, 2013, the market price per share for the available-for-sale security portfolio was as follows: kenton appliances - $30 per share, laymont co. - $24 per share, and fairway travels - $25 per share.

a. create the proper journal entries to adjust the available-for-sale security portfolio to fair value on december 31, 2013.

b. describe what affect the december 31, 2013 journal entry will have on the income statement.



4. attached file
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