1 Record the above four transactions in general journal. 3.2. Define marketable securities. What characteristics of these securities justify classifying them as financial assets?
Q: Rell Corporation reports under IFRS No. 9. Rell has an investment in Tirish, Inc. bonds that Rell…
A: 1. Prepare the journal to record the impairment loss for Company R, on December 31, 2018, assuming…
Q: Swifty holds bonds issued by Dorsel Corp. The bonds have an amortized cost of $316,000 and their…
A: Journal Entry: Journal entry is the book of original entry where first transactions are recorded in…
Q: S&L Financial buys and sells securities which it classifies as available-for-sale. Assume that on…
A: Bonds are debt security under which the issuer owes the holders a debt and depending on the terms of…
Q: For several years Fister Links Products has held Microsoft bonds, considered by the company to be…
A: Investment will be reported at fair value in the balance sheet on December 31, 2022 i.e. $600,000.
Q: Required information [The following information applies to the questions displayed below] Brooks…
A: The investment in equity securities or in debt securities classified as available for sale security,…
Q: Bentz Corporation bought and sold several securities during 2024. Listed below is a summary of the…
A: Journal Entries;-A journal entry is a written record of a business transaction that is recorded in…
Q: Happy Sdn Bhd purchased a debt instrument on 1 January 2023 at its fair value of RM5 million. The…
A: Happy Sdn Bhd purchased a debt instrument on 1 January 2023Fair value = $5 million.The face value =…
Q: Mills Corporation acquired as an investment $235 million of 8% bonds, dated July 1, on July 1, 2021.…
A: Journal entry is defined as the act of keeping or maintaining the transactions of the business into…
Q: 37. On November 1, 2021, Romblon Company invested in P600,000 in equity securities representing…
A: Aa per IAS 39, Financial instruments recognition and measurement, In investment in equity shares…
Q: Tanner-unf corporation acquired as a long-term investment 245 million of 8% bonds, dated July 1, on…
A: Definition: Bonds: A bond is a debt instrument, which is repaid along with a specific rate of…
Q: 2. Edwards Company began business in February of 2021. During the year, Edwards purchased the three…
A: Based on the prevailing market fair value and the cost of securities, the unrealized profit/loss in…
Q: Tanner-UNF Corporation acquired as a long-term investment $245 million of 8% bonds, dated July 1, on…
A: "Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Mills Corporation acquired as a long-term investment $220 1 of 6% bonds, dated July July Company…
A: Bonds:The bond is the financial instrument that is used by the company to get the loan amount so…
Q: Mills Corporation acquired as an investment $260 million of 5% bonds, dated July 1, on July 1, 2024.…
A: The company can make investments in bonds. The company invests to increase earnings. The company…
Q: Tanner-UNF Corporation acquired as a long-term investment $300 million of 7% bonds, dated July 1, on…
A: A Journal entry is a primary entry that records the financial transactions initially. The…
Q: Required: 1. How will Tanner-UNF's investment in the bonds on July 1, 2024 affect the financial…
A: Balance SheetIncome StatementAssetsLiabilitiesStockholders' EquityRevenues & GainsExpenses &…
Q: Mills Corporation acquired as a long-term investment $260 million of 6% bonds, dated July 1, on July…
A: A journal entry is a record in accounting that captures a business transaction by showing the debit…
Q: On May 5, 2021, Eblue Corporation exchanged 40,000 shares of its P25 par value treasury ordinary…
A: Number of shares exchanged = 40,000 The fair market value of shares at the time of exchange = P25…
Q: Tanner-UNF Corporation acquired as a long-term investment $300 million of 6% bonds, dated July 1, on…
A: Journal Entry: Refers to the recording of transactions in the books of accounts of business entity.…
Q: S&L Financial buys and sells securities expecting to earn profits on short-term differences in…
A: Tax: Tax refers to a compulsory payment or a contribution to the state revenue, levied by the…
Q: Mills Corporation acquired as an investment $240 million of 8% bonc olding the bonds in its trading…
A: Bonds also known as fixed income instrument, are used by governments or companies to raise money by…
Q: Tanner-UNF Corporation acquired as a long-term investment $260 million of 7% bonds, dated July 1, on…
A: A fair value adjustment on the bonds when the bonds has been hold for the trading portfolio is…
Q: Hey Company' investments in debt and equity securities reveals the following information: a) On…
A:
Q: Mills Corporation acquired as an investment $240 million of 7% bonds, dated July 1, on July 1, 2024.…
A: Journal entry is defined as the act of keeping or maintaining the transactions of the business into…
Q: Mills Corporation acquired as a long-term investment $270 million of 8% bonds, dated July 1, on July…
A: Introduction long-term investment: An account that a business intends to hold for at minimum a…
Q: On January 15, 2020 bieber co purchased 30,000 shares of Hand Co. at $35 per share, paying $10,000…
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…
Q: Mills Corporation acquired as an investment $240 million of 6% bonds, dated July 1, on July 1, 2021.…
A: Investment means an asset purchased in expectation of earning a return on such investment in future…
Q: Amalgamated General Corporation is a consulting firm that also offers financial services through its…
A: Journal entry: It is the first step of recording transactions of a company. Before this, no other…
Q: The following selected transactions relate to investment activities of Ornamental Insulation…
A: Journal Entry: Method of recording financial transactions in the book of original entry by debiting…
Q: 1. & 2. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2021 and…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: . & 2. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2021 and…
A:
Q: Tanner-UNF Corporation acquired as an investment $240 million of 7% bonds, dated July 1, on July 1,…
A: Journal entries refers to the process of systematic documentation of the financial transactions of a…
Q: On November 1, 2019, TUNA Company invested P600,000 in equity securities representing 20,000…
A: Realised gain is the gain which is achieved after selling an asset at a higher price than the…
Q: S&L Financial buys and sells securities which it classifies as available-for-sale. Assume that on…
A: Pre-tax income is significant because it helps individuals and organizations understand their…
Q: 3.1. Calculate the normal tax consequences arising from the above distributions for Midway(Pty)…
A: In the given question, The cash distribution is the dividend that the company needs to distribute to…
Q: Mills Corporation acquired as a long-term investment $260 million of 6% bonds, dated July 1, on July…
A: A journal entry is a record in accounting that captures a business transaction by showing the debit…
Q: Orange Company purchased as a long-term investment $100 million of 10% bonds, dated July 1, on July…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Bentz Corporation bought and sold several securities during 2024. Listed below is a summary of the…
A: Journal Entries;- A journal entry is a written record of a business transaction that is recorded in…
Q: purchased 2,000 shares of Potter Wholesale for $35 per share. Based on the percentage of outstanding…
A: The realised gain or loss is the difference between the Fair Value of Stock and Sale Value of Stock…
Q: A company purchases debt securities for $100,000 at the beginning of 2022. It classifies as trading…
A: An investment in debt securities may be classified as either trading securities, available for sale…
During the year 2021 Azimuth Corporation engaged in the following transaction with marketable securities:
May 14: Azimuth purchases as a short-term investment 1,000 shares of ADIDAS. Azimuth paid €197.15 per share, plus a brokerage commission of €240. August 27: Azimuth sells 100 shares of its ADIDAS stock for €197.81 per share, less a €102 brokerage commission.
October 10: Azimuth receives a €3.40 per share dividend on its ADIDAS shares.
December 31: ADIDAS stock has a current market value of €198.12 per share.
3.1 Record the above four transactions in general journal.
3.2. Define marketable securities. What characteristics of these securities justify classifying them as financial assets?
Step by step
Solved in 2 steps
- S&L Financial buys and sells securities which it classifies as available-for-sale. Assume that on December 27, 2024, S&L purchased Coca-Cola bonds at par for $745,000 and sold the bonds on January 3, 2025, for $748,500. At December 31, the bonds had a fair value of $742,500, and S&L has the intent and ability to hold the investment until fair value recovers. What pretax amounts did S&L include in its 2024 and 2025 net income as a result of thisMills Corporation acquired as a long-term investment $260 million of 6% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 4% for bonds of similar risk and maturity. Mills paid $300 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $280 million. Required:1. & 2. Prepare the journal entry to record Mills’ investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate.3. At what amount will Mills report its investment in the December 31, 2021, balance sheet?4. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, for $314 million. Prepare the journal entries required on the date of sale.S&L Financial buys and sells securities that it typically classifies as available-for-sale. On December 27, 2018,S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2019, for $880,000. AtDecember 31, the bonds had a fair value of $873,000. When it purchased the Coca-Cola bonds, S&L Financialdecided to elect the fair value option for this investment. What pretax amounts did S&L include in its 2018 and2019 net income as a result of this investment (ignoring interest)?
- Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $210 million.Required:1. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2021.2. Prepare the journal entries by Tanner-UNF to record interest on December 31, 2021, at the effective (market) rate.3. At what amount will Tanner-UNF report its investment in the December 31, 2021, balance sheet? Why?4. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2022, for $190 million. Prepare…Tanner Co. acquired $120,000 of 6% bonds, dated July 1, on July 1, 2021 by paying $100,000. Tanner is holding the bonds in its trading portfolo, The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner will receive interest semlannually on June 30 and December 31. The fair value of the bonds on December 31, 2021 was $105,000. Tanner decided to sell the investment on January 2, 2022 for $95,000. Identify the following statements that are TRUE. The journal entry on December 31, 2021 to record interest includes a credit to Interest Revenue of $4,000 and a debit to Discount on Bond Investment of $400. The journal entry on December 31, 2021 to record the fair value adjustment would include a debit to Fair Value Adjustment of $4,600. The journal entry on January 2, 2022 to update the fair value adjustment would include a credit to Gain on Investments (Realized, Other Comprehensive Income). The journal entry on January 2, 2022 to update the fair value adjustment…Stanley Dodge Corporation bought several marketable securities during 2020. At December 31, 2020, the company possessed investments in bonds listed below. All are considered securities available-for-sale. At January 1, 2020, the Corporation's Fair Value Adjustment Account had a credit balance of $150,000. Cost Fair Value Unrealized Holding Gain(Loss) Short Term: Ashkent, Inc $1,100,000 $1,300,000 Imagen Pharma 1,200,000 1,150,000 Total Long term: Erdinger Foods $2,000,000 $1,980,000 Ashanti Gold 1,500,000 1,750,000 Total Prepare the adjusting entries for December 31, 2020. Show how you arrived at the balance needed for the Fair Value Adjustment on 12/31/2020.
- The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2024. me buys debt securities, intending to profit from short-term differences in price and maintaining them in an active trading portfolio. Ornamental's fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2023. March 31 Acquired 8% Distribution Transformers Corporation bonds costing $420,000 at face value. September 1 Acquired $960,000 of American Instruments' 10% bonds at face value. September 30 Received semiannual interest payment on the Distribution Transformers bonds. October 2 Sold the Distribution Transformers bonds for $455,000. November 1 Purchased $1,500,000 of M&D Corporation 6% bonds at face value. December 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are American Instruments bonds M&D Corporation bonds (Hint: Interest must be accrued.) 'J $912,000 $ 1,562,000…Jupiter Bank decides to invest in trading securities in order to take advantage of short-term gains. The bank purchased the following securities for the year 2020. Jan. 15, 2020 Purchased 1,000 shares of Corbin Company common stock for $89 per share. May 23, 2020 Purchased 1500 shares of Petro Company common stock for $75 per share. At the end of 2020, Corbin Company's common stock was trading on the market at $93 per share, and Petro's common stock had a market price of $70 per share. Required: 1. Prepare journal entries to record the preceding information. 2. What is the unrealized holding gain or loss and where is it reported on the 2020 financial statements? Enter your answer as positive amount.Berkshire Co. purchases debt investments in trading securities at a cost of $130 on July 1. (This is its first and only purchase of trading securities.) On December 30, Berkshire received $1 of interest from its trading securities. At year-end December 31, the trading securities had a fair value of $140. a. Prepare the July 1 purchase entry of trading securities. b. Prepare the December 30 entry for receipt of cash interest. c. Prepare the December 31 year-end adjusting entry for the trading securities’ portfolio. d. Explain how each account in entry c is reported in financial statements. e. Prepare the January 3 entry when a portion of its trading securities (that had cost $33) is sold for $36.
- The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2024. The company buys debt securities, intending to profit from short- term differences in price and maintaining them in an active trading portfolio. Ornamental's fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2023. March 31 Acquired 8% Distribution Transformers Corporation bonds costing S 430,000 at face value. September 1 Acquired $990, 000 of American Instruments' 10% bonds at face value. September 30 Received semiannual interest payment on the Distribution Transformers bonds. October 2 Sold the Distribution Transformers bonds for $470,000. November 1 Purchased $1,550, 000 of M&D Corporation 6% bonds at face value. December 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are American Instruments bonds S 943, 000 M&D Corporation bonds S 1,613,000 (Hint: Interest…On Jan. 1, 2021, an entity bought investment in bonds and classified it as an investment at amortized cost. It has a total face value of P5,000,000 and an acquisition cost of P5,088,700. It pays an interest rate of 6%, to be paid semiannually every June 30 and Dec. 31. It matures on Dec. 31, 2024. The acquisition resulted to an effective interest rate of 5.5%. On Dec. 31, 2021, the bonds have a total fair value of P5,010,000. what is the Investment in Bonds as of acquisition?The following investment-related transactions were completed by the company during 2021: Purchased P3,000,000.00 of ABC Corporation 7% bonds, paying 102.5 plus accrued interest of P52,500.00. In addition, the company paid brokerage fee of P15,000.00. The company classified these bonds as a trading security. • Purchased 30,000 shares of XYZ Corporation ordinary shares at P125 per share plus brokerage fees of P28,500. The company classified this stock as available for sale. Received semi-annual interest on the ABC Corporation bonds. Sold 4,500 shares of XYZ Corporation at P132 per share. Sold P480,000 of ABC Corporation 7% bonds at 102, plus accrued interest of P2,790.00. Determine the current portion of the investments.
