The following information relates to the debt securities investments of Cheyenne Company. 1. 2. 3. 4. 5. 6. 7. On February 1, the company purchased 10% bonds of Gibbons Co. having a par value of $303,600 at 100 plus accrued interest. Interest is payable April 1 and October 1. On April 1, semiannual interest is received. On July 1, 10% bonds of Sampson, Inc. were purchased. These bonds with a par value of $183,600 were purchased at 100 plus accrued interest. Interest dates are June 1 and December 1. On September 1, bonds with a par value of $56,400, purchased on February 1, are sold at 98 plus accrued interest. On October 1, semiannual interest is received. On December 1, semiannual interest is received. On December 31, the fair value of the bonds purchased February 1 and July 1 are 94 and 92, respectively.
The following information relates to the debt securities investments of Cheyenne Company. 1. 2. 3. 4. 5. 6. 7. On February 1, the company purchased 10% bonds of Gibbons Co. having a par value of $303,600 at 100 plus accrued interest. Interest is payable April 1 and October 1. On April 1, semiannual interest is received. On July 1, 10% bonds of Sampson, Inc. were purchased. These bonds with a par value of $183,600 were purchased at 100 plus accrued interest. Interest dates are June 1 and December 1. On September 1, bonds with a par value of $56,400, purchased on February 1, are sold at 98 plus accrued interest. On October 1, semiannual interest is received. On December 1, semiannual interest is received. On December 31, the fair value of the bonds purchased February 1 and July 1 are 94 and 92, respectively.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:(a)
Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale
securities. (Note to instructor: Some students may debit Interest Receivable at date of purchase instead of Interest Revenue. This
procedure is correct, assuming that when the cash is received for the interest, an appropriate credit to Interest Receivable is
recorded.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No
Entry" for the account titles and enter O for the amounts.)
Transcribed Image Text:The following information relates to the debt securities investments of Cheyenne Company.
1.
2.
3.
4.
5.
6.
7.
On February 1, the company purchased 10% bonds of Gibbons Co. having a par value of $303,600 at 100 plus accrued
interest. Interest is payable April 1 and October 1.
On April 1, semiannual interest is received.
On July 1, 10% bonds of Sampson, Inc. were purchased. These bonds with a par value of $183,600 were purchased at 100 plus
accrued interest. Interest dates are June 1 and December 1.
On September 1, bonds with a par value of $56,400, purchased on February 1, are sold at 98 plus accrued interest.
On October 1, semiannual interest is received.
On December 1, semiannual interest is received.
On December 31, the fair value of the bonds purchased February 1 and July 1 are 94 and 92, respectively.
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