On December 1, 2024, Loki's Restaurant decides to invest excess cash of $56,000 from the tourist season by purchasing a Robin, Inc. bond at face value. At year-end, December 31, 2024, Robin's bond had a market value of $52,800. The investment is categorized as an available-for-sale debt investment and will be held for the short-term Read the requirements Requirement 1. Journalize the transactions for Loki's investment in Robin, Inc. for 2024. (Record debits first, then credits. Select the explanation on the last line of the journal entry table. If no entry is required, select "No entry required" on the first line of the Accounts and Explanation column and leave the remaining cells blank.) Begin by journalizing Loki's investment in the Robin, Inc., bond on December 1, 2024. Date Accounts and Explanation Dec. 1 Debit Credit Requirements 1. Journalize the transactions for Loki's investment in Robin, Inc. for 2024. 2. In what category and at what value would Loki report the asset on the December 31, 2024, balance sheet? In what account would the market price change in Robin's stock be reported, if at all? 3. What was the net effect of the investment on Loki's net income for the year ended December 31, 2024? Print Done - X
On December 1, 2024, Loki's Restaurant decides to invest excess cash of $56,000 from the tourist season by purchasing a Robin, Inc. bond at face value. At year-end, December 31, 2024, Robin's bond had a market value of $52,800. The investment is categorized as an available-for-sale debt investment and will be held for the short-term Read the requirements Requirement 1. Journalize the transactions for Loki's investment in Robin, Inc. for 2024. (Record debits first, then credits. Select the explanation on the last line of the journal entry table. If no entry is required, select "No entry required" on the first line of the Accounts and Explanation column and leave the remaining cells blank.) Begin by journalizing Loki's investment in the Robin, Inc., bond on December 1, 2024. Date Accounts and Explanation Dec. 1 Debit Credit Requirements 1. Journalize the transactions for Loki's investment in Robin, Inc. for 2024. 2. In what category and at what value would Loki report the asset on the December 31, 2024, balance sheet? In what account would the market price change in Robin's stock be reported, if at all? 3. What was the net effect of the investment on Loki's net income for the year ended December 31, 2024? Print Done - X
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:**Investment Scenario Analysis for Loki’s Restaurant**
On December 1, 2024, Loki's Restaurant decides to invest its excess cash of $56,000 from the tourist season by purchasing a Robin, Inc. bond at face value. By the end of the year, on December 31, 2024, Robin's bond had a market value of $52,800. The investment is categorized as an available-for-sale debt investment and will be held short-term.
**Journal Entry Requirement:**
**Requirement 1:**
Journalize the transactions for Loki’s investment in Robin, Inc. for 2024. (Record debits first, then credits. Select the explanation on the last line of the journal entry table. If no entry is required, select "No entry required" on the first line of the Accounts and Explanation column and leave the remaining cells blank.)
Begin by journalizing Loki’s investment in the Robin, Inc., bond on December 1, 2024.
| Date | Accounts and Explanation | Debit | Credit |
|--------|--------------------------|-------|--------|
| Dec. 1 | | | |
| | | | |
| | | | |
| | | | |
**Requirements Window Details:**
1. Journalize the transactions for Loki’s investment in Robin, Inc. for 2024.
2. In what category and at what value would Loki report the asset on the December 31, 2024, balance sheet? In what account would the market price change in Robin's stock be reported, if at all?
3. What was the net effect of the investment on Loki’s net income for the year ended December 31, 2024?
Options to print or mark as done are available at the bottom of the requirements window.
Expert Solution
Step 1
Bonds are debt instruments that are issued to raise the funds. The corporation of government normally issued the debt instrument. The bonds are fixed-interest debts that require interest payment either annually or semiannually. The bond interest is termed the coupon rate. The market interest rate and coupon rate may be different.
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