sale debt, held to maturity debt, equity investments), as there are different rules for each. We...

  

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sale debt, held to maturity debt, equity investments), as there are different rules for each. We Separate control accounts must be kept for each type of portfolio (trading debt, available for portfolios are classified based upon the level of influence the owner of the stock has over the adjustment and has no impact on entries to buy, sell and record cash income. Portfolios of Buy, Sell, Recording Income Let's forget about fair value adjustment procedure for now. It is an end of the ye debt investments may be classified as tading ilable for sale, or held to maturity. Equi company that issued the stock. We will foeus on equity investments that give the holder "little or no influence," or less than 20% of ownership. will use an account for each invesment such as "Trading debt – Ford Bonds," or "PAus investment - GM Common Stock." The following investments were owned on December 31, 2013: Investment Trading Debt Ford $1,000 bonds, 7% annual interest each 12/31. 5 years to maturity. Star $1,000 bonds, 8% annual interest each 12/31. 2 years to maturity. Equity Investments (under 20%) GM common stock Fiserv common Market Quantity Cost $920 cach Amortized to $886.28 cach at 10% annual effective rate Amortized to 100 bonds $983 each 50 bonds $982.41 cach at 9% annual effective rate 5,000 shares 6,000 shares $30 each $45 each $32 each $60 each stock Fiserv common stock AMC common stock | 10,000 shares Acme common stock 5,000 shares $60 each $80 each 10,000 shares $28 each $40 each $25 each $50 each *Use your financial calculator to calculate these amounts using FV, pmt, n and effective rate. Also do amortization table covering the next year Part A: (For Monday) Record the following information for 2014: 1. A$.50 per share dividend was received on the AMC common stock. 2. A 10% stock dividend was received on the Fiserv common stock. 3. 2,000 M&I common shares were sold for $75 each less a brokerage fee on the transaction of $200. 4. 5,000 Zepco common shares were purchased as Equity investments for $34 each plus brokerage fees of $300 on the transaction. 5. Interest was received on the Star and Ford bonds. on December 31, 2014 is: The portfolio Investment Trading Debt Ford $1,000 bonds, 7% annual interest each 12/31. 4 years to maturity. Star $1,000 bonds, 8% annual interest each 12/31. 1 year to maturity. Equity Investments (under 20%) Acme common stock 5,000 shares GM common stock Quantity Cost 100 bonds Market $940 each Use your amortization table 50 bonds Use your amortization table $987 each 5,000 shares 6,000 shares $50 each $30 each $30 each $29 each $65 each Fiserv common $45 each stock M&I common stock Calculate 5,000 shares $90 each $37 each Calculate Zepco common stock Calculate AMC common stock 10,000 shares $25 each $32 each Part B- Market adjustments Calculate and make entries for market adjustments for December 31, 2013 • Calculate and make entries for market adjustments for December 31, 2014 sale debt, held to maturity debt, equity investments), as there are different rules for each. We Separate control accounts must be kept for each type of portfolio (trading debt, available for portfolios are classified based upon the level of influence the owner of the stock has over the adjustment and has no impact on entries to buy, sell and record cash income. Portfolios of Buy, Sell, Recording Income Let's forget about fair value adjustment procedure for now. It is an end of the ye debt investments may be classified as tading ilable for sale, or held to maturity. Equi company that issued the stock. We will foeus on equity investments that give the holder "little or no influence," or less than 20% of ownership. will use an account for each invesment such as "Trading debt – Ford Bonds," or "PAus investment - GM Common Stock." The following investments were owned on December 31, 2013: Investment Trading Debt Ford $1,000 bonds, 7% annual interest each 12/31. 5 years to maturity. Star $1,000 bonds, 8% annual interest each 12/31. 2 years to maturity. Equity Investments (under 20%) GM common stock Fiserv common Market Quantity Cost $920 cach Amortized to $886.28 cach at 10% annual effective rate Amortized to 100 bonds $983 each 50 bonds $982.41 cach at 9% annual effective rate 5,000 shares 6,000 shares $30 each $45 each $32 each $60 each stock Fiserv common stock AMC common stock | 10,000 shares Acme common stock 5,000 shares $60 each $80 each 10,000 shares $28 each $40 each $25 each $50 each *Use your financial calculator to calculate these amounts using FV, pmt, n and effective rate. Also do amortization table covering the next year Part A: (For Monday) Record the following information for 2014: 1. A$.50 per share dividend was received on the AMC common stock. 2. A 10% stock dividend was received on the Fiserv common stock. 3. 2,000 M&I common shares were sold for $75 each less a brokerage fee on the transaction of $200. 4. 5,000 Zepco common shares were purchased as Equity investments for $34 each plus brokerage fees of $300 on the transaction. 5. Interest was received on the Star and Ford bonds. on December 31, 2014 is: The portfolio Investment Trading Debt Ford $1,000 bonds, 7% annual interest each 12/31. 4 years to maturity. Star $1,000 bonds, 8% annual interest each 12/31. 1 year to maturity. Equity Investments (under 20%) Acme common stock 5,000 shares GM common stock Quantity Cost 100 bonds Market $940 each Use your amortization table 50 bonds Use your amortization table $987 each 5,000 shares 6,000 shares $50 each $30 each $30 each $29 each $65 each Fiserv common $45 each stock M&I common stock Calculate 5,000 shares $90 each $37 each Calculate Zepco common stock Calculate AMC common stock 10,000 shares $25 each $32 each Part B- Market adjustments Calculate and make entries for market adjustments for December 31, 2013 • Calculate and make entries for market adjustments for December 31, 2014

Answer rating: 100% (QA)

Market Adjustments for December 31 2013 AFS Bonds Date Journal Entries Computations 121213 Trading Debt Ford Bonds dr 3372 Unrealized Gain cr 3372 Fair Value 92000 920 x 100 Less Carrying Value 88628 ... View the full answer