Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale Securities Company A bonds Company B notes Company C bonds Fair Value $ 495,000 147,000 648,390 Stoll enters into the following transactions involving its available-for-sale debt securities this year. January 29 Sold one-half of the Company B notes for $78,170. July 6 Purchased Company X bonds for $127,000. November 13 Purchased Company 2 notes for $267,500. December 9 Sold all of the Company A bonds for $517,400. Fair values at December 31 are B, $80,600; C, $600,800; X, $120,000; and Z, $279,000. Cost $530,500 159,080 663,000 Required: 1. Prepare journal entries to record these transactions, including the December 31 adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities. 2. Determine the amount Stoll reports on its December 31 balance sheet for its long-term investments in available-for-sale securities.

Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale Securities Company A bonds Company B notes Company C bonds Fair Value $ 495,000 147,000 648,390 Stoll enters into the following transactions involving its available-for-sale debt securities this year. January 29 Sold one-half of the Company B notes for $78,170. July 6 Purchased Company X bonds for $127,000. November 13 Purchased Company 2 notes for $267,500. December 9 Sold all of the Company A bonds for $517,400. Fair values at December 31 are B, $80,600; C, $600,800; X, $120,000; and Z, $279,000. Cost $530,500 159,080 663,000 Required: 1. Prepare journal entries to record these transactions, including the December 31 adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities. 2. Determine the amount Stoll reports on its December 31 balance sheet for its long-term investments in available-for-sale securities.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On June 30, Jamison Company issued $2,500,000 of 10-year, 9% bonds, dated June 30, for $2,580,000. Present entries to record the following transaction. (a) Issuance of bonds.
on 7/2/Y1 Loch Ness, Inc. purchased 50 of the $1,000 face bonds issued by EBerry Corp. Loch Ness paid $1,000 for each bond. The EBerry Corp. bonds were trading at 108 on 12/31/Y1 and at 98 on 12/31/Y2. Loch Ness sold all 50 of the EBerry bonds on 7/1/Y3 for when the market price was 104. They prepare financial statements on December 31st each year. Prepare all the JE needed for Loch Ness's investment in EBerry. Show calculation
The Wilfred Company sold 8% bonds, dated January 1, with a face amount of $90 million on January 1, year 1 to Rexton-Base Corporation. The bonds mature on December 31, year 10 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Prepare the journal entry to record interest revenue on June 30, year 1 (at the effective rate).
Debt Investment Transactions, Available-for-Sale Valuation Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Rekya Mart Inc., which has a fiscal year ending on December 31: Year 1 Apr. 1. Purchased $60,000 of Smoke Bay 7%, 10-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on February 1 and August 1. May 16. Purchased $96,000 of Geotherma Co. 6%, 12-year bonds at their face amount plus accrued interest of $240. The bonds pay interest semiannually on May 1 and November 1. Aug. 1. Received semiannual interest on the Smoke Bay bonds. Sept. 1. Sold $24,000 of Smoke Bay bonds at 104 plus accrued interest of $140. Nov. 1. Received semiannual interest on the Geotherma Co. bonds. Dec. 31 Accrued $840 interest on Smoke Bay bonds. Dec. 31 Accrued $480 interest on Geotherma Co. bonds. Year 2 Feb. 1. Received…
Levi Company issued $84,000 of 11% bonds on January 1 of the current year at face value. The bonds pay interest semiannually on January 1 and July 1. The bonds are dated January 1 and mature in 5 years on January 1. The total interest expense related to these bonds for the current year ending on December 31 is a. $4,620 b. $770 c. $6,930 d. $9,240
Garcia Company issues 13.5%, 15-year bonds with a par value of $490,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 11.5%, which implies a selling price of 112 1/4. Prepare the journal entry for the issuance of these bonds for cash on January 1. View transaction list Journal entry worksheet 1 Record the issue of bonds with a par value of $490,000 at a selling price of 112 1/4. Note: Enter debits before credits. Date January 01 Record entry General Journal Clear entry Debit Credit View general journal
I. Metro Company purchased $500,000, 10%, 5-year bonds on January 1, 20x1, with interest payable on July 1 and January 1. The market interest rate (yield) was 8% for bonds of similar risk and maturity. The market value on December 31, 20x1 was $555,000 and all bonds were sold for $507,500 on January 1, 20x2 after the second payment. Required: compute the bond price on January 1, 20x1, prepare the amortization schedule and record journal entries on January 1, 20x1, July 1, 20x1, December 31, 20x1 and January 1, 20x2 assuming the bond investment is classified as available-for-sale security.
Selected debt investment transactions for Easy A Inc., a retail business, are listed below. Easy A Inc. has a fiscal year ending on December 31. Year 1: Feb. 1 May 1 Jun. 1 Sept. 1 Oct. 1 Dec. 1 Dec. 31 Year 2: Mar. 1 Jun. 1 Sept. 1 Bought $35,000 of 6%, XYZ Co. 12-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on June 1 and December 1. Bought $200,000 of Simple Tree 5%, 20-year bonds at their face amount plus accrued interest of $2,500. The bonds pay interest semiannually on March 1 and September 1. Received semiannual interest on the XYZ Co. bonds. Received semiannual interest on the Simple Tree bonds. Sold $15,000 of Simple Tree bonds at 102% plus accrued interest of $63. Received semiannual interest on the XYZ Co. bonds. Accrued $3,135 interest on the Simple Tree bonds. Accrued $175 interest on the XYZ Co. bonds. Received semiannual interest on the Simple Tree bonds. Received semiannual interest on the XYZ Co. bonds. Received…
Marketable Debt Securities Use the financial statement effects template to record the accounts and amounts for the following four transactions involving investments in marketable debt securities classified as available-for-sale securities. a. Loudder Inc. purchases 10,000 bonds with a face value of $1,000 per bond. The bonds are purchased at par for cash and pay interest at a semi-annual rate of 4%. b. Loudder receives semi-annual cash interest of $200,000. c. Year-end fair value of the bonds is $978 per bond. d. Shortly after year-end, Loudder sells all 10,000 bonds for $970 per bond. Use negative signs with answers, if appropriate. Transaction Loudder purchases bonds. Loudder receives cash interest. Bonds year-end fair value is determined. Loudder sells all bonds Cash Asset + Noncash Assets Balance Sheet = Liabilities + Contrib. Captial + Earned Capital Revenues Income Statement Expenses = Net income
-k A 0 nces Smith Co.'s long-term available-for-sale portfolio at the start of this year consists of the following. Available for Sale Securities Cost $ 576,530 163,300 Fair Value $ 498,150 Company A bonds Company B notes 159,750 Company C bonds. 641,750 723,930 Smith enters into the following transactions involving its available-for-sale debt securities this year. January 29 July 6 November 13 Sold one-half of the notes of Company B for $80,940. Purchased bonds of Company X for $126,800. Purchased notes of Company 2 for $210,000. December 9 Sold all of the bonds of Company A for $564,999. Fair values at December 31 are: B, $83,300; C.$646,000; X, $119,000; and Z. $217,000. Requirement General Journal Fair Value Transaction Adjustment Analysis Prepare journal entries to record each of the transactions and events. Prepare the year-end adjustment to fair value, if a View transaction list General Ledger Journal entry worksheet < Trial Balance Note: Enter debits before credits. 5 Using the…
Am. 113.