Prepare Krum Company's journal entries to record the following transactions involving its short-term investments in available-for-sale debt securities, all of which occurred during the current year. a. On August 1, paid $66,000 cash to purchase Houtte's 12%, six-month debt securities ($66,000 principal), dated August 1. b. On October 30, received a check from Houtte for 90 days' interest on the debt securities in transaction a. (Use 360 days in a year. Do not round your intermediate calculations.) View transaction list Journal entry worksheet 1 2 On August 1, paid $66,000 cash to purchase Houtte's 12% six-month debt securities ($66,000 principal), dated August 1. a. Note: Enter debits before credits. Transaction General Journal Debit Credit

Prepare Krum Company's journal entries to record the following transactions involving its short-term investments in available-for-sale debt securities, all of which occurred during the current year. a. On August 1, paid $66,000 cash to purchase Houtte's 12%, six-month debt securities ($66,000 principal), dated August 1. b. On October 30, received a check from Houtte for 90 days' interest on the debt securities in transaction a. (Use 360 days in a year. Do not round your intermediate calculations.) View transaction list Journal entry worksheet 1 2 On August 1, paid $66,000 cash to purchase Houtte's 12% six-month debt securities ($66,000 principal), dated August 1. a. Note: Enter debits before credits. Transaction General Journal Debit Credit

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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How do I journalize the bonds?
Kier Company issued $740,000 in bonds on January 1, Year 1. The bonds were issued at face value and carried a 3-year term to maturity. The bonds have a 5.50% stated rate of interest interest is payable in cash on December 31 each year. Based on this information alone, what are the amounts of interest expense and cash flows from operating activities, respectively, that will be reported in the financial statements for the year ending December 31, Year 1? Multiple Choice O Zero and $40,700 $40,700 and $40,700 Zero and Zero $40,700 and Zero
On January 1, the first day of the fiscal year, a company issues a $700,000, 7%, 10-year bond that pays semiannua interest of $24,500 ($700,000 x 7% x V2 year), receiving cash of $700,000. (a) Journalize the entry to record the issuance of the bonds. Cash 700,000 Bonds Payable - (b) Journalize the entry to record the first interest payment on June 30. Interest Expense Cash
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Prepare Natura Company's journal entries to record the following transactions involving its short-term investments in held-to-maturity debt securities, all of which occurred during the current year. a. On June 15, paid $180,000 cash to purchase Remed's 90-day short-term debt securities ($180,000 principal), dated June 15, that pay 7% interest. b. On September 16, received a check from Remed in payment of the principal and 90 days' interest on the debt securities purchased in transaction a. Note: Use 360 days in a year. Do not round your intermediate calculations. View transaction list Journal entry worksheet < 1 2 On June 15, paid $180,000 cash to purchase Remed's 90-day short-term debt securities ($180,000 principal), dated June 15, that pay 7% interest. Note: Enter debits before credits. Transaction a. Record entry General Journal Clear entry Debit Credit View general journal
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Doyle Company issued $362,000 of 10-year, 5 percent bonds on January 1, Year 1. The bonds were issued at face value. Interest is payable in cash on December 31 of each year. Doyle immediately invested the proceeds from the bond issue in land. The land was leased for an annual $52, 500 of cash revenue, which was collected on December 31 of each year, beginning December 31, Year 1. Journal entry worksheet Note: Enter debits before credits. 4 Date Dec 31 5 ü 6 Record the interest expense for bonds payable for Year 2. General Journal C 7 8 Debit Credit >
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Prepare Hertog Company's journal entries to record the following transactions for the current year. May 7 Purchases Kraft bonds as a short-term investment in trading securities at a cost of $10,990. June 6 Sells its entire investment in Kraft bonds for $11,510 cash. View transaction list Journal entry worksheet 1 2 Purchases Kraft bonds as a short-term investment in trading securities at a cost of $10,990. Note: Enter debits before credits. Date May 07 Record entry General Journal Clear entry Debit Credit View general journal >
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