Pina Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases,
Question:
Pina Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions.
Feb. 1, 2017 | Sharapova Company common stock, $120 par, 240 shares | $40,800 | ||
April 1 | U.S. government bonds, 12%, due April 1, 2027, interest payable April 1 and October 1, 96 bonds of $1,000 par each | 96,000 | ||
July 1 | McGrath Company 12% bonds, par $50,100, dated March 1, 2017, purchased at 104 plus accrued interest, interest payable annually on March 1, due March 1, 2037 | 54,108 |
A. Prepare entries necessary to classify the amounts into proper accounts, assuming that all the securities are classified as available-for-sale.
B. Prepare the entry to record the accrued interest and the amortizatin of premium on December 31, 2017, using the straight-line method.
C. The fair values of the investments on December 31, 2017, were:
Sharapova Company common stock | $29,300 | |
U.S. government bonds | 136,500 | |
McGrath Company bonds | 54,900 |
What entry, if any, would you recommend be made?
D. The U.S. government bonds were sold on July 1, 2018, for $115,300 plus accrued interest. Give the proper entry.
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield