Safety Development Corporation had relatively large idle cash balances and invested them as follows in securities to be held as non-strategic investments: 2023 Feb. 7 Purchased 2,700 common shares of Royal Bank at $27.00, plus $500 in transaction fees. 19 Purchased 1,700 common shares of Imperial Oil at $53.00, and paid $250 in transaction fees. Apr. 1 Paid $93,215 plus $500 in transaction fees for a 7.80%, four-year, $95,000 Minco Inc. bond that pays interest quarterly beginning June 30. The market rate of interest on this date was 8.20%. Sellers Corporation plans to hold this investment for the duration of the bond’s contract life. May 26 Purchased 2,500 common shares of BCE at $13.88, plus $200 in transaction fees. June 1 Received a $0.25 per share cash dividend on the Royal Bank common shares. 17 Sold 1,700 Royal Bank common shares at $27.50. 30 Received interest on the Minco Inc. bond. Aug. 5 Received a $0.50 per share cash dividend on the Imperial Oil common shares. Sept. 1 Received a $0.275 per share cash dividend on the remaining Royal Bank common shares. 30 Received interest on the Minco Inc. bond. Dec. 31 Received interest on the Minco Inc. bond. On December 31, 2023, the fair values of the investments held by Safety Development Corporation were: Royal Bank, $28.00; Imperial Oil, $51.38; and BCE, $14.00. Assume the fair value and carrying value of the Minco Inc. bond were equal. Required: 1. Prepare an amortization schedule for the Minco Inc. bond showing only 2023. (Round your intermediate and final answers to the nearest whole dollar amount. Enter all the amounts as positive values.) 2. Prepare journal entries to record the investment activity including the appropriate fair value adjustment on December 31. (Round your intermediate and final answers to the nearest whole dollar amount.) 3. Show how the investments will be reported on the December 31, 2023, balance sheet. (Round your intermediate and final answers to the nearest whole dollar amount.)

Safety Development Corporation had relatively large idle cash balances and invested them as follows in securities to be held as non-strategic investments: 2023 Feb. 7 Purchased 2,700 common shares of Royal Bank at $27.00, plus $500 in transaction fees. 19 Purchased 1,700 common shares of Imperial Oil at $53.00, and paid $250 in transaction fees. Apr. 1 Paid $93,215 plus $500 in transaction fees for a 7.80%, four-year, $95,000 Minco Inc. bond that pays interest quarterly beginning June 30. The market rate of interest on this date was 8.20%. Sellers Corporation plans to hold this investment for the duration of the bond’s contract life. May 26 Purchased 2,500 common shares of BCE at $13.88, plus $200 in transaction fees. June 1 Received a $0.25 per share cash dividend on the Royal Bank common shares. 17 Sold 1,700 Royal Bank common shares at $27.50. 30 Received interest on the Minco Inc. bond. Aug. 5 Received a $0.50 per share cash dividend on the Imperial Oil common shares. Sept. 1 Received a $0.275 per share cash dividend on the remaining Royal Bank common shares. 30 Received interest on the Minco Inc. bond. Dec. 31 Received interest on the Minco Inc. bond. On December 31, 2023, the fair values of the investments held by Safety Development Corporation were: Royal Bank, $28.00; Imperial Oil, $51.38; and BCE, $14.00. Assume the fair value and carrying value of the Minco Inc. bond were equal. Required: 1. Prepare an amortization schedule for the Minco Inc. bond showing only 2023. (Round your intermediate and final answers to the nearest whole dollar amount. Enter all the amounts as positive values.) 2. Prepare journal entries to record the investment activity including the appropriate fair value adjustment on December 31. (Round your intermediate and final answers to the nearest whole dollar amount.) 3. Show how the investments will be reported on the December 31, 2023, balance sheet. (Round your intermediate and final answers to the nearest whole dollar amount.)

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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Safety Development Corporation had relatively large idle cash balances and invested them as follows in securities to be held as non-strategic investments:

2023
Feb.	7	Purchased 2,700 common shares of Royal Bank at $27.00, plus $500 in transaction fees.
	19	Purchased 1,700 common shares of Imperial Oil at $53.00, and paid $250 in transaction fees.
Apr.	1	Paid $93,215 plus $500 in transaction fees for a 7.80%, four-year, $95,000 Minco Inc. bond that pays interest quarterly beginning June 30. The market rate of interest on this date was 8.20%. Sellers Corporation plans to hold this investment for the duration of the bond’s contract life.
May	26	Purchased 2,500 common shares of BCE at $13.88, plus $200 in transaction fees.
June	1	Received a $0.25 per share cash dividend on the Royal Bank common shares.
	17	Sold 1,700 Royal Bank common shares at $27.50.
	30	Received interest on the Minco Inc. bond.
Aug.	5	Received a $0.50 per share cash dividend on the Imperial Oil common shares.
Sept.	1	Received a $0.275 per share cash dividend on the remaining Royal Bank common shares.
	30	Received interest on the Minco Inc. bond.
Dec.	31	Received interest on the Minco Inc. bond.

On December 31, 2023, the fair values of the investments held by Safety Development Corporation were: Royal Bank, $28.00; Imperial Oil, $51.38; and BCE, $14.00. Assume the fair value and carrying value of the Minco Inc. bond were equal.

Required:
1. Prepare an amortization schedule for the Minco Inc. bond showing only 2023. (Round your intermediate and final answers to the nearest whole dollar amount. Enter all the amounts as positive values.)

2. Prepare journal entries to record the investment activity including the appropriate fair value adjustment on December 31. (Round your intermediate and final answers to the nearest whole dollar amount.)

3. Show how the investments will be reported on the December 31, 2023, balance sheet. (Round your intermediate and final answers to the nearest whole dollar amount.)

Please answer complete and correct with working thanks

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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