Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company's fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear's trading account occurred during December 2021 and the first week of 2022. 2021 Dec. 17 Purchased 185 Grocers' Supply Corporation bonds at par for $462,500. 28 Received interest of $ 5,400 from the Grocers' Supply Corporation bonds. 31 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market price of the bond was $3,000 per bond. 2022 Jan. 5 Sold the Grocers' Supply Corporation bonds for $527,250. Required: 1. Prepare the appropriate journal entry or entries for each transaction. 2. Indicate any amounts that Rantzow-Lear Company would report in its 2021 balance sheet and income statement as a result of this investment.
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company's fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear's trading account occurred during December 2021 and the first week of 2022. 2021 Dec. 17 Purchased 185 Grocers' Supply Corporation bonds at par for $462,500. 28 Received interest of $ 5,400 from the Grocers' Supply Corporation bonds. 31 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market price of the bond was $3,000 per bond. 2022 Jan. 5 Sold the Grocers' Supply Corporation bonds for $527,250. Required: 1. Prepare the appropriate journal entry or entries for each transaction. 2. Indicate any amounts that Rantzow-Lear Company would report in its 2021 balance sheet and income statement as a result of this investment.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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am. 101.
Transcribed Image Text:Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and
holds these investments in its trading portfolio. The company's fiscal year ends on December 31. The following selected
transactions relating to Rantzow-Lear's trading account occurred during December 2021 and the first week of
2022. 2021 Dec. 17 Purchased 185 Grocers' Supply Corporation bonds at par for $462, 500. 28 Received interest of $
5,400 from the Grocers' Supply Corporation bonds. 31 Recorded any necessary adjusting entry relating to the Grocers'
Supply Corporation bonds. The market price of the bond was $3,000 per bond. 2022 Jan. 5 Sold the Grocers' Supply
Corporation bonds for $527,250. Required: 1. Prepare the appropriate journal entry or entries for each transaction. 2.
Indicate any amounts that Rantzow-Lear Company would report in its 2021 balance sheet and income statement as a
result of this investment.
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