Henry Inc. purchased $8,000 of Container Corporation's 5% bonds at par. The purchase was made on...

 

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Henry Inc. purchased $8,000 of Container Corporation's 5% bonds at par. The purchase was made on January 1 and the investment was classified as a trading security. At June 30, Henry Inc. received semiannual interest of $200, and adjusted the investment to its fair value of $7,680. Then, Henry Inc. sold its holdings of Container Corporation bonds on July 2, for $7,680. a. Record the sale of the debt investment. Date July 2 Date Dec. 31 Account Name Check To record the sale of the investment. Account Name Debit To adjust the FVA account. 0 OO 0 0 b. Adjust the Fair Value Adjustment account on December 31, the company's year-end. Debit Credit 0 0 OOO 0 0 0 Credit 0 0 Henry Inc. purchased $8,000 of Container Corporation's 5% bonds at par. The purchase was made on January 1 and the investment was classified as a trading security. At June 30, Henry Inc. received semiannual interest of $200, and adjusted the investment to its fair value of $7,680. Then, Henry Inc. sold its holdings of Container Corporation bonds on July 2, for $7,680. a. Record the sale of the debt investment. Date July 2 Date Dec. 31 Account Name Check To record the sale of the investment. Account Name Debit To adjust the FVA account. 0 OO 0 0 b. Adjust the Fair Value Adjustment account on December 31, the company's year-end. Debit Credit 0 0 OOO 0 0 0 Credit 0 0

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