Fair Value Journal Entries, Trading Investments Gruden Bancorp Inc. purchased a portfolio of trading securities during Year 1. The cost and fair value of this portfolio on December 31, Year 1, was as follows: Name Number of Shares Total Cost Total Fair Value Griffin Inc. 1,100 $14,740 $13,860 Luck Company 850 27,880 25,930 Wilson Company 250 7,250 7,400 Total $49,870 $47,190 On May 10, Year 2, Gruden Bancorp Inc. purchased 500 shares of Carroll Inc., at $29 per share plus a $80 brokerage commission. Provide the journal entries to record the following: a. The adjustment of the trading security portfolio to fair value on December 31, Year 1. Year 1, Dec. 31 b. The May 10, Year 2, purchase of Carroll Inc. stock. Year 2, May 10

Fair Value Journal Entries, Trading Investments Gruden Bancorp Inc. purchased a portfolio of trading securities during Year 1. The cost and fair value of this portfolio on December 31, Year 1, was as follows: Name Number of Shares Total Cost Total Fair Value Griffin Inc. 1,100 $14,740 $13,860 Luck Company 850 27,880 25,930 Wilson Company 250 7,250 7,400 Total $49,870 $47,190 On May 10, Year 2, Gruden Bancorp Inc. purchased 500 shares of Carroll Inc., at $29 per share plus a $80 brokerage commission. Provide the journal entries to record the following: a. The adjustment of the trading security portfolio to fair value on December 31, Year 1. Year 1, Dec. 31 b. The May 10, Year 2, purchase of Carroll Inc. stock. Year 2, May 10

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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Debt Investment Transactions, Available-for-Sale Valuation Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Rekya Mart Inc., which has a fiscal year ending on December 31: Year 1 Apr. 1. Purchased $60,000 of Smoke Bay 7%, 10-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on February 1 and August 1. May 16. Purchased $96,000 of Geotherma Co. 6%, 12-year bonds at their face amount plus accrued interest of $240. The bonds pay interest semiannually on May 1 and November 1. Aug. 1. Received semiannual interest on the Smoke Bay bonds. Sept. 1. Sold $24,000 of Smoke Bay bonds at 104 plus accrued interest of $140. Nov. 1. Received semiannual interest on the Geotherma Co. bonds. Dec. 31 Accrued $840 interest on Smoke Bay bonds. Dec. 31 Accrued $480 interest on Geotherma Co. bonds. Year 2 Feb. 1. Received…
Selected debt investment transactions for Easy A Inc., a retail business, are listed below. Easy A Inc. has a fiscal year ending on December 31. Year 1: Feb. 1 May 1 Jun. 1 Sept. 1 Oct. 1 Dec. 1 Dec. 31 Year 2: Mar. 1 Jun. 1 Sept. 1 Bought $35,000 of 6%, XYZ Co. 12-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on June 1 and December 1. Bought $200,000 of Simple Tree 5%, 20-year bonds at their face amount plus accrued interest of $2,500. The bonds pay interest semiannually on March 1 and September 1. Received semiannual interest on the XYZ Co. bonds. Received semiannual interest on the Simple Tree bonds. Sold $15,000 of Simple Tree bonds at 102% plus accrued interest of $63. Received semiannual interest on the XYZ Co. bonds. Accrued $3,135 interest on the Simple Tree bonds. Accrued $175 interest on the XYZ Co. bonds. Received semiannual interest on the Simple Tree bonds. Received semiannual interest on the XYZ Co. bonds. Received…
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Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 Sold all of the Johnson & Johnson bonds for $23,500. Sold all of the Mattel bonds for $35,850. April 15 July 5 July 22 August 19 Purchased Sara Lee notes for $13,500. Purchased Kodak bonds for $15,300. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 Sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara Lee notes for $9,750. November 1 Sold all of the…
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Topic: Investment Prepare all necessary entries and provide all financial statements
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During the month, Blue, Inc. purchased 1,050 shares for $7.00 per share and classified them as trading investments. At the end of the month, the price of the securities was $11.25 per share. What adjusting entry, if any, will Blue, Inc. record when it closes its books at the end of the month to reflect this change in value?ᐧ a Dr. Valuation Allowance for Trading Investments $11,812.50 Cr. Unrealized Gain on Trading Investments $11,812.50 b Dr. Unrealized Loss on Trading Investment $4,462.50 Cr. Valuation Allowance for Trading Investments $4,462.50 c Dr. Valuation Allowance for Trading Investments $4,462.50 Cr. Unrealized Gain on Trading Investments $4,462.50 Because the trading investments were not sold during the month, no adjusting entry is required. d Dr. Valuation Allowance for Trading Investments $4,462.50 Cr. Realized Gain on Trading Investments $4,462.50
Carla Corporation purchased trading investment bonds for $50,000 at par. At December 31, Carla received annual interest of $2,000, and the fair value of the bonds was $49,000. Assume a zero balance in the Fair Value Adjustment account. Prepare Carla’s journal entries for the following. If no entry is required, write "No Entry". The purchase of the investment. The interest received. The fair value adjustment.