Question: Time crunch - please help me solve these questions (and show the math)!!! 1. On February 15, Cancun Co. paid $120,000 cash to purchase American

Time crunch - please help me solve these questions (and show the math)!!!

1.

On February 15, Cancun Co. paid $120,000 cash to purchase American General's 90-day short-term notes at par, which are dated February 15 and pay 10% interest (classified as held-to-maturity). The journal entry to record this transaction would include a:

Debit Cash for $120,000; credit to Short -Term Investments - HTM $120,000.

Debit Long-Term Investments - HTM $144,000; credit to Interest Revenue $24,000; credit Cash $120,000.

Debit Debt Investments - HTM $120,000; credit Cash $120,000.

Debit Cash for $120,000; credit Debt Investments - HTM $120,000.

2.

On May 2, Cara Co. received a check from Alyse General in payment of the principle and 45 day's interest on a $132,000, 45-day short-term note purchased on March 18. The interest rate on the note was 10%. The journal entry Cara Co. would make to record receipt of payment of the principle and interest on May 2 would include a:

Debit to Cash, $132,000; debit to Interest Revenue, $1,650; credit to Debt Investments - HTM, $133,650.

Debit to Cash, $132,000; a credit to Debt Investments - HTM, $132,000, credit to Dividend Revenue, $1,650.

Debit to Cash, $133,650, credit to Debt Investments - HTM, $132,000; a credit to Interest Revenue, $1,650.

Debit to Cash, $145,200; credit to Debt Investments -HTM, $132,000; credit to Interest Revenue, $13,200.

3.

On March 20, Avery Company buys bonds of Rizzo Corp. for $180,000. The investment is classified as available-for-sale securities. This is Avery's first and only investment in available-for-sale securities. On December 31, the bonds had a fair value of $178,700. The entry to record the year-end adjustment is:

Debit Unrealized Loss - Equity $1,300; credit Fair Value AdjustmentAvailable-for-Sale $1,300

Debit Fair Value AdjustmentAvailable-for-Sale $1,300; credit Interest Revenue $1,300.

Debit Loss on Sale of Investments $1,300; credit Debt Investments - Available-For-Sale $1,300.

Debit Cash $1,300; credit Dividend Revenue $1,300.

4.

On February 15, Garnet Company buys 7,000 shares of Marco Corp. at $32.96 per share. The stock is classified as an equity investment with insignificant influence. This is the company's first and only stock investment. On March 15, Marco Corp. declares a dividend of $0.95 per share payable to stockholders of record on April 15. Garnet Company received the dividend on April 15. The journal entry Garnet would make to record the dividend should include:

Credit to Equity Method Investments for $6,650

Credit Interest Revenue for $6,650

Credit Earnings from Equity Method Investments for $6,650

Credit to Dividend Revenue for $6,650

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