The following transactions of Knight, Inc., occurred within the same accounting period: (a) Purchased $105,000 U.S. Treasury
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(a) Purchased $105,000 U.S. Treasury 7% bonds, paying 103 plus accrued interest of $1,200. In addition, Knight paid brokerage fees of $470. Knight uses the revenue approach to record accrued interest on purchased bonds. Knight classified this security as a trading security.
(b) Purchased 1,700 shares of Sand Co. common stock at $85 per share plus brokerage fees of $1,750. Knight classifies this stock as an available-for-sale security.
(c) Received semiannual interest on the U.S. Treasury bonds.
(d) Sold 250 shares of Sand at $97 per share.
(e) Sold $30,000 of U.S. Treasury 7% bonds at 102 plus accrued interest of $350.
(f) Purchased a $20,000, 6-month certificate of deposit. The certificate is classified as a trading security.
Prepare the entries necessary to record these transactions.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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a Investment in Trading Securities x Treasury Bonds 108620 Interest Revenue 1200 Cash 109820 To reco...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-0324312140
16th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
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