Gard Company completes the following transactions related to its short-term debt investments.May 8 Purchased FedEx notes as a short-term investment in available-for-sale securities for $12,975.Sep. 2 Sold part of its investment in FedEx notes for $4,475, which had cost $4,325.Oct. 2 Purchased Ajay bonds for $25,600 as a short-term investment in available-for-sale securities. Required1. Prepare journal entries for the transactions.2. Prepare a year-end adjusting journal entry as of December 31 if the fair values of the debt securitiesheld by Gard are $9,600 for FedEx and $22,000 for Ajay. (This year is the first year Gard Companyacquired short-term debt investments.)

Journal entry is recording the transaction of the business into the books of accounts of the entity…

Answered: Gard Company completes the following…

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 the day Federer Ltd redeemed its $1,000,000 face value bonds at 98, their carrying value was $1,200,000. Prepare a residual analysis for the bond redemption. Prepare the journal entry for the bond redemption. If you recognise a gain or loss, state where in the Statement of Comprehensive Income the gain or loss should appear
10. Float Corporation had the following transactions pertaining to debt investments. Jan. 1 Purchased 100 8%, $1,000 Qaiz Co. bonds for $100,000 cash plus brokerage fees of $1,800. Interest is payable semiannually on July 1 and January 1. Received semiannual interest on Qaiz Co. bonds. Sold 60 Qaiz Co. bonds for $68,000 less $1,000 brokerage fees. July 1 July 1 Required: a) Journalize the transactions. b) Prepare the adjusting entry for the accrual of interest at December 31.
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Pharoah Corporation purchased trading investment bonds for $60,000 at par. At December 31, Pharoah received annual interest of $2,400, and the fair value of the bonds was $57,400. Prepare Pharoah' journal entries for (a) the purchase of the investment, (b) the interest received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (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.) No. Account Titles and Explanation (a) (b) (c) Debit Credit
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Crane Limited had $2.39 million of bonds payable outstanding and the unamortized premium for these bonds amounted to $44,600. Each $1,000 bond was convertible into 20 preferred shares. All bonds were then converted into preferred shares. The Contributed Surplus - Conversion Rights account had a balance of $21,500. Assume that the company follows IFRS. a. Assuming that the book value method was used, what entry would be made? Account Titles and Explanation Debit Credit b. Assume that Crane Ltd. offers $9,000 to induce early conversion. What journal entry would be made? Account Titles and Explanation Debit Credit
On July 1, 20x3, Wenna Inc. purchased as a short-term investment a P 1,000,000 face value Keizen Co. 8% bond for P 910,000 plus accrued interest to yield 10%. The bonds mature on January 1, 20x10, pay interest annually on January 1, and are classified as Debt Investments @ Fair Value through Profit or Loss. On December 31, 20x3, the bonds had a fair value of P 945,000. On February 13, 20x4, Wenna sold the bonds for P 920,000. On July 1, 20x3, how much cash was paid by Wenna Inc. in connection with the purchase of the Debt Investments?
Parilo Company acquired $183,600 of Makofske Company, 6% bonds on May 1, 20Y5, at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, 20Y5, Parilo sold $52,200 of the bonds for 96. Journalize the entries to record the following under the cost method:
Gadubhi

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