Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, andno credits, with the following descriptions.Feb. 1, 2025April 1July 1(a)Sharapova Company common stock, $100 par, 200 sharesU.S. government bonds, 11%, due April 1, 2035, interest payable April 1 and October 1, 110 bonds of$1,000 par eachMcGrath Company 12% bonds, par $50,000, dated March 1, 2025, purchased at 104 plus accruedinterest, interest payable annually on March 1, due March 1, 2045Account Titles and ExplanationDebt InvestmentsPrepare entries necessary to classify the amounts into proper accounts, assuming that the debt securities are classified asavailable-for-sale. Sharapova has 200,000 shares outstanding. (List all debit entries before credit entries. Credit account titles areautomatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles andenter o for the amounts.)Debit$37,400Credit110,00054,000

Available for sale securities are securities purchased with the intent to sell before their…

Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions. Feb 1 2025 Sharapova Company.common stock $100par 200 shares $37.100

Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions. Feb 1 2025 Sharapova Company.common stock $100par 200 shares $37.100

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 5RE

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Question

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Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and
no credits, with the following descriptions.
Feb. 1, 2025
April 1
July 1
(a)
Sharapova Company common stock, $100 par, 200 shares
U.S. government bonds, 11%, due April 1, 2035, interest payable April 1 and October 1, 110 bonds of
$1,000 par each
McGrath Company 12% bonds, par $50,000, dated March 1, 2025, purchased at 104 plus accrued
interest, interest payable annually on March 1, due March 1, 2045
Account Titles and Explanation
Debt Investments
Prepare entries necessary to classify the amounts into proper accounts, assuming that the debt securities are classified as
available-for-sale. Sharapova has 200,000 shares outstanding. (List all debit entries before credit entries. Credit account titles are
automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and
enter o for the amounts.)
Debit
$37,400
Credit
110,000
54,000

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(b)
Prepare the entry to record the accrued interest and the amortization of premium on December 31, 2025, using the straight-line
method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places,
e.g. 1,225.)
Date
Dec. 31,
2025
Account Titles and Explanation
Debit
Credit

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(Debt and Equity Investments) Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions. Feb. 1, 2017 Sharapova Company common stock, $100 par, 200 shares : $ 37,400 April 1 U.S. government bonds, 11%, due April 1, 2027, interest payableApril 1 and October 1, 110 bonds of $1,000 par each : 110,000 July 1 McGrath Company 12% bonds, par $50,000, dated March 1, 2017,purchased at 104 plus accrued interest, interest payable annually on March 1, due March 1, 2037 : 54,000 Instructions(Round all computations to the nearest dollar.)(a) Prepare entries necessary to classify the amounts into proper accounts, assuming that the debt securities are classified as available-for-sale.(b) Prepare the entry to record the accrued interest and the amortization of premium on December 31, 2017, using the straight-line method.(c) The fair values of the investments on December…
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