Savers Mart Inc. is a general merchandise retail company that began operations on January 1, 2012. The
Question:
2012
May 1. Purchased $80,000 of Northridge City 4.5%, 10-year bonds at face value plus accrued interest of $600. The bonds pay interest semiannually on March 1 and September 1.
June 16. Purchased $38,000 of Hancock Co. 6%, 12-year bonds at face value plus accrued interest of $95. The bonds pay interest semiannually on June 1 and December 1.
Sept. 1 Received semiannual interest on the Northridge City bonds.
Oct. 1 Sold $24,000 of Northridge City bonds at 102 plus accrued interest of $90.
Dec. 1 Received semiannual interest on Hancock Co. bonds.
31. Accrued $840 interest on Northridge City bonds.
31. Accrued $190 interest on Hancock Co. bonds.
2013
Mar. 1 Received semiannual interest on the Northridge City bonds.
June. 1 Received semiannual interest on the Hancock Co. 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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1 2012 May 1 Investments Northridge City Bonds 80000 Interest Receivable 600 Cash 80600 June 16 Inve...View the full answer
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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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