HKCC Investment Limited engaged in investment activities with the following companies in 2022. Its financial year-end...

  

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HKCC Investment Limited engaged in investment activities with the following companies in 2022. Its financial year-end is December 31. ABC Limited Jan 1 Jun 30 Dec 31 HKCC acquired 80,000 shares of ABC Limited for $800,000 cash (it represents 25% of the outstanding ordinary shares). ABC declared and paid cash dividends of $0.5 each share. ABC Limited paid cash dividends of $20,000 and reported net income of $500,000. DEF Limited Apr 1 Oct 1 HKCC acquired bonds from DEF Limited at $900,000 and intends and can hold it until its maturity (the mature date of the bonds is 1 Apr 2025). The bond has a face value of $1,000,000 and stated interest rate at 6%. The market rate of similar bonds is 9% at the date of purchase. Empower adopts the effective interest method to account for the amortization of bonds discounts or premiums. DEF Limited declared the semi-annual interest. Its first interest payment was due on 1 October 2022. GHI Limited May 1 Aug 31 Dec 31 HKCC purchased 6,000 GHI Limited shares at $10 each with commission fee $1,500. Investment for GHI Limited is treated as trading securities. It sold out half of GHI's shares at $18 less commission andbrokerage fee of 2,000 on 31 August. GHI Limited declared and paid cash dividends $2 for each share. JKL Limited Jul 1 Dec 31 HKCC acquired 5,000 JKL Limited shares at $50,000. Investment for JKL Limited is classified as non-trading. JKL Limited declared and paid cash dividends $1.8 for each share. Other information: The market price or fair value of the investments at the financial year-end are shown as below: ABC Limited: $18 per share DEF Limited: $900,000 (bond) GHI Limited: $13 per share JKL Limited: $11 per share Required: Prepare all relevant journal entries for the above investments happened in 2022. (Answers should be rounded to the nearest dollar) for each of the following companies: a) ABC Limited b) DEF Limited c) GHI Limited d) JKL Limited End of Assignment 1- (8 marks) (13 marks) (12 marks) (7 marks) HKCC Investment Limited engaged in investment activities with the following companies in 2022. Its financial year-end is December 31. ABC Limited Jan 1 Jun 30 Dec 31 HKCC acquired 80,000 shares of ABC Limited for $800,000 cash (it represents 25% of the outstanding ordinary shares). ABC declared and paid cash dividends of $0.5 each share. ABC Limited paid cash dividends of $20,000 and reported net income of $500,000. DEF Limited Apr 1 Oct 1 HKCC acquired bonds from DEF Limited at $900,000 and intends and can hold it until its maturity (the mature date of the bonds is 1 Apr 2025). The bond has a face value of $1,000,000 and stated interest rate at 6%. The market rate of similar bonds is 9% at the date of purchase. Empower adopts the effective interest method to account for the amortization of bonds discounts or premiums. DEF Limited declared the semi-annual interest. Its first interest payment was due on 1 October 2022. GHI Limited May 1 Aug 31 Dec 31 HKCC purchased 6,000 GHI Limited shares at $10 each with commission fee $1,500. Investment for GHI Limited is treated as trading securities. It sold out half of GHI's shares at $18 less commission andbrokerage fee of 2,000 on 31 August. GHI Limited declared and paid cash dividends $2 for each share. JKL Limited Jul 1 Dec 31 HKCC acquired 5,000 JKL Limited shares at $50,000. Investment for JKL Limited is classified as non-trading. JKL Limited declared and paid cash dividends $1.8 for each share. Other information: The market price or fair value of the investments at the financial year-end are shown as below: ABC Limited: $18 per share DEF Limited: $900,000 (bond) GHI Limited: $13 per share JKL Limited: $11 per share Required: Prepare all relevant journal entries for the above investments happened in 2022. (Answers should be rounded to the nearest dollar) for each of the following companies: a) ABC Limited b) DEF Limited c) GHI Limited d) JKL Limited End of Assignment 1- (8 marks) (13 marks) (12 marks) (7 marks)

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