On May 12, Year 1, Chewco Co. purchased 2,000 shares of Jedi Inc. for $112 per share, including the brokerage commission. The Jedi investment was classified as an available-for-sale security. On December 31, Year 1, the fair value of Jedi Inc. was $124 per share. The net income of Chewco Co. was $50,000 for Year 1. Compute the comprehensive income for Chewco Co. for the year ended December 31, Year 1.
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- On July 1, Year 1, XYZ Corporation purchased as a long-term investment a $2 million face amountABC Co. 6% bond for $2,025,000 plus accrued interest to yield 5.75%. On December 31, Year 1,the bonds had a fair value of $1,850,000. What amount of income should XYZ report on its incomestatement for the year ended December 31, Year 1, related to this bond investment if it is classifiedas a held-to-maturity security?a. $120,000b. $116,438c. $121,500d. $115,000Crane 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 CreditOn July 1, Year 2, San Benon Company purchased 4,000 of the P1,000 face amount, 8% bonds of Oat Corp. for 3,692,000 to yield a 10% per annum. The bonds, which mature on July 1, Year 5, pay interest semiannually on January 1 and July 1. San Benon classifies the securities as at amortized cost. What is the investment carrying value at December 31, Year 2?
- On February 15, Jewel Company buys bonds of Marcelo Corp. for $201,700. The investment is classified as available-for-sale securities. This is the company’s first and only investment in available-for-sale securities. On December 31, the bonds had a fair value of $203,700. The entry to record the year-end adjustment is: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 CreditStorm, Inc. purchased the following available-for-sale securities during Year 1, its first year of operations: Please see the attachment for details: The market price per share for the available-for-sale security portfolio on December 31,Year 1, was as follows: Please see the attachment for details: a. Provide the journal entry to adjust the available-for-sale security portfolio to fair value on December 31, Year 1.b. Describe the income statement impact from the December 31, Year 1, journal entry.
- Cullumber Corporation purchased trading investment bonds for $42,000 at par. At December 31, Cullumber received annual interest of $1,680, and the fair value of the bonds was $39,400. Prepare Cullumber's 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)The following information relates to the debt securities investments of Sunland Company. 1. On February 1, the company purchased 10% bonds of Gibbons Co. having a par value of $324,000 at 100 plus accrued interest. Interest is payable April 1 and October 1. 2. On April 1, semiannual interest is received. 3. On July 1, 9% bonds of Sampson, Inc. were purchased. These bonds with a par value of $186,000 were purchased at 100 plus accrued interest. Interest dates are June 1 and December 1. 4. On September 1, bonds with a par value of $60,000, purchased on February 1, are sold at 99 plus accrued interest. 5. On October 1, semiannual interest is received. 6. On December 1, semiannual interest is received. 7. On December 31, the fair value of the bonds purchased February 1 and July 1 are 95 and 93, respectively. (a)Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale securities.…Martinez Corporation purchased trading investment bonds for $43,000 at par. At December 31, Martinez received annual interest of $1,720, and the fair value of the bonds was $40,200. Prepare Martinez 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 F
- GadubhiOn January 1, Year 2, Grand Company purchased as held for collection investment P1,000,000 face value of Greek Company’s 8% bonds for P912,400. The bonds were purchased to yield 10% interest. The bonds mature on January 1 Year 7, and pay interest annually on January 1. What amount should Grand Company report on its December 31, Year 2 statement of financial position for held for collection investment?In footnotes to its year-end annual report, Bancfirst Corp. reported that held-to-maturity debt securities with an amortized cost of $8,730 thousand had an estimated fair value of $8,806 thousand. The balance sheet reported: Select one: a. Held-to-maturity assets of $8,730 thousand b. Held-to-maturity assets of $8,806 thousand c. Accumulated other comprehensive income of $76 thousand related to held-to-maturity assets d. Both A and C e. Both B and C