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 2024 and the first week of 2025. December 17, 2024 Purchased 100 Grocers' Supply Corporation bonds at par for $350,000. December 28, 2024 Received interest of $2,000 from the Grocers' Supply Corporation bonds. December 31, 2024 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market price of the bond was $4,000 per bond. January 5, 2025 Sold the Grocers' Supply Corporation bonds for $395,000. Required: 1. Prepare the appropriate journal entry or entries for each transaction. 2. Indicate any amounts that Rantzow-Lear Company would report in its 2024 balance sheet and income statement as a result of this investment. Ignore income taxes.

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 2024 and the first week of 2025. December 17, 2024 Purchased 100 Grocers' Supply Corporation bonds at par for $350,000. December 28, 2024 Received interest of $2,000 from the Grocers' Supply Corporation bonds. December 31, 2024 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market price of the bond was $4,000 per bond. January 5, 2025 Sold the Grocers' Supply Corporation bonds for $395,000. Required: 1. Prepare the appropriate journal entry or entries for each transaction. 2. Indicate any amounts that Rantzow-Lear Company would report in its 2024 balance sheet and income statement as a result of this investment. Ignore income taxes.

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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