On July 1. 2015, Allarco Inc. acquired the following bonds, which Allarco Inc. intended to hold...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On July 1. 2015, Allarco Inc. acquired the following bonds, which Allarco Inc. intended to hold to maturity: Bond Segura Corporation 11% bonds, maturity date December 31, 2020 108 Price Face Amount Purchased $385,000 Northstar Corp. 6% bonds, maturity date, December 31, 2022 97 200,000 Both bonds pay interest annually on December 31. Premium and discount will be amortized on a straight-line basis. Assume Allarco Inc. follows ASPE. Piease make sure your final answer(s) are accurate to 2 decimal places. 1) Prepare the following journal entries to be made on their correct dates in 2015: a. The acquisition of the investments. Accrued interest was paid on the acquisition dates, as appropriate. b. The receipt of interest and the amortization of the premium or discount for Segura Corporation. c. The receipt of interest and the amortization of the premium or discount for Northstar Corp. Enter the transaction letter as the description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie, January 15 would be 15/Jan). General Journal Account/Explanation Page G5 PR Debit Credit Date 2) Show the accounts and the corresponding amounts that would be reported in the 2015 income statement retated to these investments. 2015 3) Calculate the balance for each investment account on the financial statement date. 2015 On July 1. 2015, Allarco Inc. acquired the following bonds, which Allarco Inc. intended to hold to maturity: Bond Segura Corporation 11% bonds, maturity date December 31, 2020 108 Price Face Amount Purchased $385,000 Northstar Corp. 6% bonds, maturity date, December 31, 2022 97 200,000 Both bonds pay interest annually on December 31. Premium and discount will be amortized on a straight-line basis. Assume Allarco Inc. follows ASPE. Piease make sure your final answer(s) are accurate to 2 decimal places. 1) Prepare the following journal entries to be made on their correct dates in 2015: a. The acquisition of the investments. Accrued interest was paid on the acquisition dates, as appropriate. b. The receipt of interest and the amortization of the premium or discount for Segura Corporation. c. The receipt of interest and the amortization of the premium or discount for Northstar Corp. Enter the transaction letter as the description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie, January 15 would be 15/Jan). General Journal Account/Explanation Page G5 PR Debit Credit Date 2) Show the accounts and the corresponding amounts that would be reported in the 2015 income statement retated to these investments. 2015 3) Calculate the balance for each investment account on the financial statement date. 2015
Expert Answer:
Related Book For
Intermediate Accounting 2014 FASB Update
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
Students also viewed these accounting questions
-
Income tax was $361,437 for the year. The income tax payable was $31,000 and $41,788 at the beginning and end of the year. Cash payments for income tax reported on the statement of cash flows using...
-
Determining cost of goods sold For a recent year, Company D, Inc. (CODI) reported revenue of $39,635 million. Its gross profit was $9,116 million. What was the amount of Company D's cost of goods...
-
On July 1, 2015 the West Company purchased a 1,000,000 Pound Sterling CD from the Kardashian Bank of London. This 10% 3 year CD pays interest on June 30. Additional information is as follows: July 1,...
-
a) If the block is at rest (and the only forces acting on the block are the force due to gravity and the normal force from the table), what is the magnitude of the force due to friction? b) Suppose...
-
Prolog Ltd. is a small wholesaler of powerful microcomputers. In recent months, it has been selling 50 machines a month at a price of $2,000 each. These machines cost $1,600 each. A new model has...
-
Suntrek, based in China, is a global supplier of denim jeans for apparel companies around the world. It purchases baled raw cotton from producers in the United States and then transports it to East...
-
Suppose $U(x)$ is a utility function with Arrow-Pratt risk aversion coefficient $a(x)$. Let $V(x)=c+b U(x)$. What is the risk aversion coefficient of $V$ ?
-
The consumption function captures one of the key relationships in economics that was first developed by John Maynard Keynes. It expresses consumption as a function of disposable income, where...
-
Total cost Total activity Serving a Party $ 43,200 Serving a Diner $ 148,000 8,000 parties 20,000 diners Serving Drinks $ 72,000 48,000 drinks Total $ 263,200 Prior to the activity-based costing...
-
A company wishes to create a trust fund through a savings plan with either annual or monthly deposits under an APR of 5% over 30 years. During that time, the company has the following cash flows: a...
-
A company has agreed to supply a quantity of sodium carbonate peroxyhydrate to various farmers in the central and southern Malaysian states for the next seven years.The manager estimates that the...
-
Analysis - Apply the ideas of the author LINDA WILLIAMS, to address the film Get Out - be sure to make an argument of your own rather than just rearticulating the author's ideas.
-
Thomas Haalboom recently received his first assignment after being promoted as the Chief Supply Chain Officer of an international manufacturer of home care products. He is going to have his first...
-
Describe the main trade-off that must be made between distribution and other logistics activities?
-
Proposals are examples of persuasive documents. In "real life" they are presented to some type of decision-making group that has the power to give approval to the request that is being made - often a...
-
Reflect on how true innovation can be nurtured in organizations that prize team collaboration. (Consider whether innovation and team collaboration are mutually exclusive or beneficial concepts.)
-
The Present Value of all the expected future free cash flow of your firm is $320 million. The firm has $170 million of debt, and a cash balance of $30 million. If there are 13 million shares...
-
A consumer magazine is evaluating five brands of trash compactors for their effectiveness in reducing the volume of typical household products that are discarded. In the experiment, each block...
-
Late in 2011, Joan Seceda and four other investors took the chain of Becker Department Stores private, and the company has just completed its third year of operations under the ownership of the...
-
On July 1, 2014, Moresan Company sold special-order merchandise on credit and received in return an interest-bearing note receivable from the customer. Moresan will receive interest at the prevailing...
-
At December 31, 2014, Hillyard Corporation has a deferred tax asset of $200,000. After a careful review of all available evidence, it is determined that it is more likely than not that $60, 000 of...
-
A construction contract differs from contracts that we generally deal with that focus on an easily defined physical object because the physical object can be examined. How is the object of a...
-
What does the owner contribute to the project and what does the contractor contribute to the project?
-
For what type of project is a line-of-balance schedule particularly suited? Identify specific examples.
Study smarter with the SolutionInn App