Problem 19-2 (IAA)Mature Company carried out the following transactions in bondinvestments held for trading during the current year.Aug. 1 Purchased 5,000, P1,000, 12% bonds of AcmeCompany at 104 plus accrued interest of P150,000.The bonds pay interest semiannually on May 1 andNovember 1.31 Purchased 2,000, P1,000, 12% bonds of AvcoCompany at 98 plus accrued interest. Semiannualpayment of interest, June 30 and December 31.Dec. 1 Sold 2,000 of the Acme bonds at 102 plus accruedinterest.31 The following quotations were obtained:Acme bondsAvco bonds9899Required:a. Prepare journal entries to record the transactions.b. Present the investments on December 31.572

Investment Held for Trading According to investment held for Trading this type of investment which…

Answered: 98 99 Acme bonds Avco bonds Required: -…

98 99 Acme bonds Avco bonds Required: - Prepare journal entries to record the transactions. - Present the investments on December 31.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Problem 19-2 (IAA)
Mature Company carried out the following transactions in bond
investments held for trading during the current year.
Aug. 1 Purchased 5,000, P1,000, 12% bonds of Acme
Company at 104 plus accrued interest of P150,000.
The bonds pay interest semiannually on May 1 and
November 1.
31 Purchased 2,000, P1,000, 12% bonds of Avco
Company at 98 plus accrued interest. Semiannual
payment of interest, June 30 and December 31.
Dec. 1 Sold 2,000 of the Acme bonds at 102 plus accrued
interest.
31 The following quotations were obtained:
Acme bonds
Avco bonds
98
99
Required:
a. Prepare journal entries to record the transactions.
b. Present the investments on December 31.
572

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