Soto Industries Inc. is an athletic footware company that began operations on January 1, Year 1. The
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Question:
Soto Industries Inc. is an athletic footware company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Soto Industries Inc., which has a fiscal year ending on December 31:
Record these transactions on page 10
Year 1 | ||
Apr. | 1. | Purchased $85,800 of Welch Co. 10%, 15-year bonds at their face amount plus accrued interest of $1,430. The bonds pay interest semiannually on March 1 and September 1. |
June | 1. | Purchased $64,800 of Bailey 5%, 10-year bonds at their face amount plus accrued interest of $135. The bonds pay interest semiannually on May 1 and November 1. |
Sept. | 1 | Received semiannual interest on the Welch Co. bonds. |
30 | Sold $26,400 of Welch Co. bonds at 96 plus accrued interest of $220. | |
Nov. | 1 | Received semiannual interest on the Bailey bonds. |
Dec. | 31 | Accrued $1,980 interest on the Welch Co. bonds. |
31 | Accrued $540 interest on the Bailey bonds. |
Record these transactions on page 11
Year 2 | ||
Mar. | 1 | Received semiannual interest on the Welch Co. bonds. |
May | 1 | Received semiannual interest on the Bailey bonds. |
Required:
1. | Journalize the entries to record these transactions. Refer to the information given and the Chart of Accounts provided for the exact wording of the answer choices for text entries. |
2. | If the bond portfolio is classified as available for sale, what impact would this have on financial statement disclosure? |
Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
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