Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions.

Instructions
(Round all computations to the nearest dollar.)
a. Prepare entries necessary to classify the amounts into proper accounts, assuming that Paz plans to actively manage these investments.
b. Prepare the entry to record the accrued interest on December 31, 2019.
c. The fair values of the investments on December 31, 2019, were:
Sharapova Company shares..............................$ 31,800
Government bonds........................................124,700
McGrath Company bonds.................................58,600
What entry or entries, if any, would you recommend be made?
d. The government bonds were sold on July 1, 2020, for $119,200 plus accrued interest. Give the proper entry.

Transcribed Image Text:

Sharapova Company ordinary shares, $100 par, 200 shares Feb. 1, 2019 37,400 April 1 Government bonds, 11%, due April 1, 2025, interest payable April 1 and October 1, 110 bonds of $1,000 par each 110,000 McGrath Company 12% bonds, par $50,000, dated March 1, 2019 purchased at 104, plus accrued interest payable annually on March 1, due March 1, 2039 54,000 July 1