1.
Introduction:
Debt investment is made by the company in another company to earn revenue from non-operational activities of the business. The debt investment may be a short-term investment which are readily convertible to cash or long-term investment takes more than a year to convert them into cash.
To record:The
2.
Introduction:
Debt investment is made by the company in another company to earn revenue from non-operational activities of the business. The debt investment may be a short-term investment which are readily convertible to cash or long-term investment takes more than a year to convert them into cash.
To prepare:Table to compare year-end cost and fair value of debt investments.
3.
Introduction:
Debt investment is made by the company in another company to earn revenue from non-operational activities of the business. The debt investment may be a short-term investment which are readily convertible to cash or long-term investment takes more than a year to convert them into cash.
To prepare:Adjusting journal entries for year-end fair values.
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FINANCIAL ACCT.FUND.(LOOSELEAF)
- Accounting 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 calculationarrow_forwardAccounting Bonds Payable has a balance of $957,000 and Discount on Bonds Payable has a balance of $9,570. If the issuing corporation redeems the bonds at 97.5, what is the amount of gain or loss on redemption? a. $14,355 loss b. $9,570 gain c. $14,355 gain d. $9,570 lossarrow_forwardGodo Subject: acountingarrow_forward
- Don't give answer in imagearrow_forwardCurrent Attempt in Progress Sunland Corporation issued 1,800 $1,000 bonds at 103. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling in the market at 99, and the warrants had a market price of $35. Use the proportional method to record the issuance of the bonds and warrants. (List all debit entries before credit entries. 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. Do not round intermediate calculations. Round your answers to O decimal places, e.g. 5,125.) Account Titles and Explanation Cash Discount on Bonds Payable Paid-in Capital-Stock Warrants Bonds Payable Debit Creditarrow_forwardEntries for issuing and calling bonds; loss Hoover Company, a wholesaler of music equipment, issued $6,510,000 of 25-year, 12% callable bonds on March 1, 20Y2, at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year. 20Y2 March 1 September 1 20Y4 September 1 If an amount box does not require an entry, leave it blank. Issued the bonds for cash at their face amount. Paid the interest on the bonds. Journalize the entries to record the above selected transactions. 20Y2 Mar. 1 Called the bond issue at 102, the rate provided in the bond indenture. (Omit entry for payment of interest.) Issued the bonds for cash at their face amount. 20Y2 Sept. 1 Paid the interest on the bonds. 20Y4 Sept. 1 Called the bond issue at 102, the rate provided in the bond indenture. (Omit entry for payment of interest.)arrow_forward
- Reporting Long-Term Debt on the Balance Sheet Scott Corp. provides contracted home staging services to real estate agencies and their clients. Scott issued the following bonds in the current year: Required: Hide a. Prepare the balance sheet for 1,500 bonds with $1,000 face value which the market has valued at $45,000 below its face value. Scott Corp. Balance Sheet (Partial) $ Bonds payable, net $ Hide b. Prepare the balance sheet for 2,700 bonds with $1,000 face value which the market has valued at $85,000 above its face value. Scott Corp. Balance Sheet (Partial) $ Bonds payable, net $arrow_forward1arrow_forwardAccounting A company purchases corporate bonds for $1,000,000 and categorizes them as AFS. At year-end, their market value is $750,000. $100,000 of the decline in value is attributed to a rise in market interest rates, and $150,000 of the decline is attributed to credit losses. Prepare the year-end adjusting entry in either a T-account or spreadsheet format. See above for location of spreadsheet template. A company invests in stock of other companies for trading purposes. Its accounting year ends December 31. Its investment activity during 2019, 2020, and 2021 is as follows: a. Purchased stock of Acme Company in 2019 for $250,000 for the purpose of taking advantage of short-term volatility in the market place. b. Sold the investment shortly after purchase for $235,000. c. Purchased stock of Beeber Company in 2019 for $300,000. d. The investment had a fair value of $275,000 at the end of 2019. e. It was sold for $310,000 in late 2020. f. Purchased stock of Cromwell Company in 2019 for…arrow_forward
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