While reviewing the March 31, 2022, balance sheet of Business Solutions, Santana Rey notes that the business has built a large cash balance of $68,057. Its most recent bank money market statement shows that the funds are earning an annualized return of 0.75%. S. Rey decides to make several investments with the desire to earn a higher return on the idle cash balance. Accordingly, in April 2022, Business Solutions makes the following investments in trading securities. April 16 Purchases Johnson & Johnson bonds for $10,000. April 30 Purchases Starbucks notes for $4,400. On June 30, 2022, the fair value of the Johnson & Johnson bonds is $12,000 and the Starbucks notes is $3,800. Required: 1. Prepare journal entries to record the April purchases of trading securities by Business Solutions. 2. On June 30, 2022, prepare the adjusting entry to record any necessary fair value adjustment to its portfolio of trading securities.
While reviewing the March 31, 2022, balance sheet of Business Solutions, Santana Rey notes that the business has built a large cash balance of $68,057. Its most recent bank money market statement shows that the funds are earning an annualized return of 0.75%. S. Rey decides to make several investments with the desire to earn a higher return on the idle cash balance. Accordingly, in April 2022, Business Solutions makes the following investments in trading securities. April 16 Purchases Johnson & Johnson bonds for $10,000. April 30 Purchases Starbucks notes for $4,400. On June 30, 2022, the fair value of the Johnson & Johnson bonds is $12,000 and the Starbucks notes is $3,800. Required: 1. Prepare journal entries to record the April purchases of trading securities by Business Solutions. 2. On June 30, 2022, prepare the adjusting entry to record any necessary fair value adjustment to its portfolio of trading securities.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
While reviewing the March 31, 2022,
| April 16 | Purchases Johnson & Johnson bonds for $10,000. |
|---|---|
| April 30 | Purchases Starbucks notes for $4,400. |
On June 30, 2022, the fair value of the Johnson & Johnson bonds is $12,000 and the Starbucks notes is $3,800.
Required:
1. Prepare
2. On June 30, 2022, prepare the
![**Journal Entry Worksheet**
**Task**: Record the Debt investment in bonds of Johnson & Johnson for $10,000.
**Instructions**: Enter debits before credits.
**Journal Entry Table**:
- **Date**: April 16
- **Columns**: General Journal, Debit, Credit
1. [Blank field for General Journal entry]
2. [Blank field for Debit amount]
3. [Blank field for Credit amount]
**Buttons**:
- **Record entry**: For submitting the entry
- **Clear entry**: To reset the fields
- **View general journal**: To access the entire journal
Use this worksheet to accurately record financial transactions by entering the necessary details in the fields provided. Follow the standard accounting principle of entering debits before credits.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6d6a8eb6-c19a-4a74-9644-fcfa6615c042%2F476339e9-aa68-40b4-afe3-a9a028642440%2Frvsa5f_processed.png&w=3840&q=75)
Transcribed Image Text:**Journal Entry Worksheet**
**Task**: Record the Debt investment in bonds of Johnson & Johnson for $10,000.
**Instructions**: Enter debits before credits.
**Journal Entry Table**:
- **Date**: April 16
- **Columns**: General Journal, Debit, Credit
1. [Blank field for General Journal entry]
2. [Blank field for Debit amount]
3. [Blank field for Credit amount]
**Buttons**:
- **Record entry**: For submitting the entry
- **Clear entry**: To reset the fields
- **View general journal**: To access the entire journal
Use this worksheet to accurately record financial transactions by entering the necessary details in the fields provided. Follow the standard accounting principle of entering debits before credits.
Transcribed Image Text:**Journal Entry Worksheet**
1 | 2
---
**Task:** Record the Debt investment in notes of Starbucks for $4,400.
*Note:* Enter debits before credits.
---
| Date | General Journal | Debit | Credit |
|---------|------------------------------------|-------|--------|
| April 30| | | |
| | | | |
| | | | |
| | | | |
| | | | |
**Buttons:**
- **Record entry**
- **Clear entry**
- **View general journal**
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