On 2014 Alkhaleej Inc. purchased the Apple Inc. Common Stock (Considered Trading security) and General Electric...
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On 2014 Alkhaleej Inc. purchased the Apple Inc. Common Stock (Considered Trading security) and General Electric Bonds (Considered Held to maturity) • July 1, 2014 1) Acquiring 2,000 shares of Apple Inc. for $1,500,000 (less than 20% ownership) 2) Purchasing a General Electric $ 900,000, 12%, 5 year bond for while the market rate was 14%. The bond offers semiannual Interest payments. The price paid was 836,788. • Dec 31, 2014 3) Alkhaleej Inc. received dividends of $10,000. 4) General Electric paid the semiannual payment of 54,000 to Alkhaleej Inc. 5) Alkhaleej Inc. prepared adjusting entry to reflect the change of Fair Value as follows: Extra Information The fair value of the GE bonds is $700,000 at Dec. 31, 2014 • The fair value of the Apple. Inc. common stocks is $1,600,000 at Dec. 31. 2014 Requirement 1: Prepare the required journal entries for the events above rom 1-5 Requirement 2: Assuming this 2000 shares of Apple Inc. is a 25% of the Apple Inc. equity, record the tips: (Equity method) following events 1) Apple Inc. paid a total of $40,000 as a dividends 2) Apple earned a net profit of $400,000 On 2014 Alkhaleej Inc. purchased the Apple Inc. Common Stock (Considered Trading security) and General Electric Bonds (Considered Held to maturity) • July 1, 2014 1) Acquiring 2,000 shares of Apple Inc. for $1,500,000 (less than 20% ownership) 2) Purchasing a General Electric $ 900,000, 12%, 5 year bond for while the market rate was 14%. The bond offers semiannual Interest payments. The price paid was 836,788. • Dec 31, 2014 3) Alkhaleej Inc. received dividends of $10,000. 4) General Electric paid the semiannual payment of 54,000 to Alkhaleej Inc. 5) Alkhaleej Inc. prepared adjusting entry to reflect the change of Fair Value as follows: Extra Information The fair value of the GE bonds is $700,000 at Dec. 31, 2014 • The fair value of the Apple. Inc. common stocks is $1,600,000 at Dec. 31. 2014 Requirement 1: Prepare the required journal entries for the events above rom 1-5 Requirement 2: Assuming this 2000 shares of Apple Inc. is a 25% of the Apple Inc. equity, record the tips: (Equity method) following events 1) Apple Inc. paid a total of $40,000 as a dividends 2) Apple earned a net profit of $400,000
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SOLUTTION Requirement 1 Journal Entries for Events 15 Acquiring 2000 shares of Apple Inc for 1500000 ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0176509736
10th Canadian Edition, Volume 1
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,
Posted Date:
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