Early in its 2023 fiscal year (December 31 year end). Whispering Winds Company purchased 10,700 Kenyon Corporation commonshares for $26.18 per share, plus $1,800 in brokerage commissions. These securities were accounted for at FV-OCI (with no recycling).and transaction costs were capitalized. In September, Kenyon declared and paid a dividend of $1.02 per share, and on December 31.2023, the fair value of these shares was $290,505. On April 13, 2024, Whispering Winds sold all the Kenyon shares at a price of$28.10 each, incurring $1.925 in brokerage commissions on the sale.(a)Prepare the entry to record the purchase of the Kenyon shares. (Credit account titles are automatically indented when the amount isentered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter 0 for the amounts. List debit entrybefore credit entry)Account Titles and ExplanationDebitCredit

If an organization opts to record investments under FV-OCI (Fair Value - Other Comprehensive…

Answered: Early in its 2023 fiscal year (December…

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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On January 1, 2022, Wayne Corporation acquired 55,000 common shares of Garth Company for $30 each. At the time, Garth had 687,500 common shares outstanding. The investment was classified as FV-NI. During 2022, Garth reported net income of $800,000 and did not declare or pay dividends. At the end of 2022, the fair value of Garth’s shares was $35 per share. REQUIRED: Prepare Wayne Corporation’s journal entries for the investment in Garth for the 2022 fiscal year. Please don't give image based answer..thanku
Mills Corporation acquired as a long-term investment $245 million of 8% bonds, dated July 1, on July 1, 2024. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Mills paid $280 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, 2024, was $260 million. Required: 1. & 2. Prepare the journal entry to record Mills' investment in the bonds on July 1, 2024 and interest on December 31, 2024, at the effective (market) rate. 3. At what amount will Mills report its investment in the December 31, 2024, 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, 2025, for $295 million. Prepare the journal entries required on the date of sale. Req 1 and 2 1 Complete this…
2. Calculate the carrying value per share of Heritage's investment as reflected in the investment account on January 4, 2025. (Round your answer to 2 decimal places.) S Carrying value per share 3.Calculate the change in Heritage's equity from January 2, 2023, through January 5, 2025, resulting from its investment in Port. Equity 8.42 decreases by S 144.800
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…
Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2018. 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. Company management has classified the bonds as available-for-sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $210 million. 1. Prepare any journal entry necessary for Tanner-UNF to report its investment in the December 31, 2018, balance sheet. 2. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $190 million. Prepare the journal entries necessary to record the sale, including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale PLEASE SHOW WORK
Mills Corporation acquired as a long-term investment $235 million of 8% bonds, dated July 1, on July 1, 2024. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Mills paid $270 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, 2024, was $260 million. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2025, for $280 million. Record any reclassification adjustment.
Mills Corporation acquired as a long-term investment $235 million of 8% bonds, dated July 1, on July 1, 2024. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Mills paid $270 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, 2024, was $260 million. Required: 1. & 2. Prepare the journal entry to record Mills’ investment in the bonds on July 1, 2024 and interest on December 31, 2024, at the effective (market) rate. 3. At what amount will Mills report its investment in the December 31, 2024, 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, 2025, for $280 million. Prepare the journal entries required on the date of sale.
Blue Spruce Corporation purchased 300 common shares of Burke Inc. for $22,830 and accounted for them using FV-OCI. During the year, Burke paid a cash dividend of $3.45 per share. At year end, Burke shares had a fair value of $72.50 per share. (a) Prepare Blue Spruce's journal entry to record the purchase of the investment. (Credit account titles are automatically indented when the 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. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
Mills Corporation acquired as a long-term investment $270 million of 8% bonds, dated July 1, on July 1, 2024. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Mills paid $310 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, 2024, was $290 million. Required: 1. & 2. Prepare the journal entry to record Mills' investment in the bonds on July 1, 2024 and interest on December 31, 2024, at the effective (market) rate. 3. At what amount will Mills report its investment in the December 31, 2024, 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, 2025, for $320 million. Prepare the journal entries required on the date of sale. Answer is not complete.…
At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2026? What is the total net income reported in 2026 under each of these methods?Kingbird Donald Inc. acquired 20% of the outstanding common stock of Theresa Ivanhoe Inc. on December 31, 2025. The purchase price was $1,205,000 for 48,200 shares. Ivanhoe Inc. declared and paid an $0.85 per share cash dividend on June 30 and on December 31,2026 . Ivanhoe reported net income of $692,000 for 2026 . The fair value of Ivanhoe's stock was $28 per share at December 31 ,2026, Assume that the security is a trading security.
Tanner-UNF Corporation acquired as a long-term investment $260 million of 6% bonds, dated July 1, on July 1, 2024. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $220 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, 2024, was $230 million. Required: 1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2024 and interest on December 31, 2024, at the effective (market) rate. 3. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2024, balance sheet. 4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2025, for $200 million. Prepare the journal entries…
Monty Corporation purchased 430 common shares of Ditch Inc. for $12,900 on February 21. Monty paid a 1% commission on the share purchase and, because the shares were not publicly traded, decided to account for them following the cost model. On June 30, Ditch declared and paid a cash dividend of $2.00 per share. Prepare Monty Corporation’s journal entry to record the purchase of the investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit February 21 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Prepare Monty Corporation’s journal entry to record the dividends received. (Credit account titles are automatically indented when the amount is entered.…

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