Prepare entries to record the following non$-$strategic investment transactions of Arrowhead Investment Corporation. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.$)$

$2023$

Mar. $1$ Paid $$64,980$ to purchase a $$64,000,$ two$-$year, $8\mathrm{.}5\%$ bond payable of Action Corporation dated March $1.$ There was a $$110$ transaction fee included in the above$-$noted payment amount. Interest is paid quarterly beginning June $1.$ Management intends to actively trade bond purchases.

Apr. $16$ Bought $2,850$ common shares of Brandon Motors at $$28\mathrm{.}50.$ There was a $$110$ transaction fee included in the above$-$noted payment amount.

May $2$ Paid $$55,968$ to purchase a five$-$year, $6\mathrm{.}00\%,$ $$57,000$ bond payable of Collingwood Corporation. There was a $$110$ transaction fee included in the above$-$noted payment amount. Interest is paid annually each April $30.$

June $1$ Received a cheque from Action Corporation regarding quarterly interest.

Aug. $1$ Brandon Motors board of directors declared a dividend of $$0\mathrm{.}75$ per share to shareholders of record on August $10,$ payable August $15.$

$15$ Received the Brandon Motors dividend.

Sept. $1$ Received a cheque from Action Corporation regarding quarterly interest.

$17$ Purchased $26,700$ Dauphin Inc. common shares at $$4\mathrm{.}00.$ There was a $$110$ transaction fee.

Oct. $20$ Sold the Brandon Motors shares at $$31\mathrm{.}60.$

Dec. $1$ Received a cheque from Action Corporation regarding quarterly interest.

$1$ Sold the Action Corporation bond at $101.$

$31$ Accrued interest on the Collingwood bond. The fair value of the equity security on this date was Dauphin, $$4\mathrm{.}30.$ The carrying value equalled the fair value for the Collingwood bond.

$2024$

Apr. $30$ Received a cheque from Collingwood Corporation regarding annual interest.

Analysis Component:

If the fair value adjusting entry on December $31,2023,$ were not recorded, what would the effect be on the income statement and balance sheet?

Based on your understanding of GAAP, would it be better or worse to omit an investment loss than investment income?

multiple choice

Better

Worse

 

Answer rating: 100% (QA)

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