Rantzow - Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company's fiscal year ends on December 31. The following selected transactions relating to Rantzow - Lear's trading account occurred during December 2024 and the first week of 2025. December 17, 2024 Purchased 195 Grocers' Supply Corporation bonds at par for $487,500. December 28, 2024 Received interest of $5,800 from the Grocers' Supply Corporation bonds. December 31, 2024 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market price of the bond was $3,000 per bond. January 5, 2025 Sold the Grocers' Supply Corporation bonds for $546,000. Required: Prepare the appropriate journal entry or entries for each transaction. Indicate any amounts that Rantzow - Lear Company would report in its 2024 balance sheet and income statement as a result of this investment. Ignore income taxes.
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- Saverin, Inc. produces and sells outdoor equipment. On July 1, 2016, Saverin, Inc. issued 62,500,000 of 10-year, 9% bonds at a market (effective) interest rate of 8%, receiving cash of 66,747,178. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Instructions 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 2016, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) b. The interest payment on June 30, 2017, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) 3. Determine the total interest expense for 2016.Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price.The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’strading account occurred during December 2018 and the first week of 2019.2018Dec. 17 Purchased 100 Grocers’ Supply Corporation bonds at par for $350,000.28 Received interest of $2,000 from the Grocers’ Supply Corporation bonds.31 Recorded any necessary adjusting entry relating to the Grocers’ SupplyCorporation bonds. The market price of the stock was $4,000 per bond.2019Jan. 5 Sold the Grocers’ Supply Corporation bonds for $395,000.Required:1. Prepare the appropriate journal entry for each transaction.2. Indicate any amounts that Rantzow-Lear Company would report in its 2018 balance sheet and income statement as a result of this investment.Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2021 and the first week of 2022. 2021 Dec. 17 Purchased 105 Grocers’ Supply Corporation bonds at par for $367,500. 28 Received interest of $2,200 from the Grocers’ Supply Corporation bonds. 31 Recorded any necessary adjusting entry relating to the Grocers’ Supply Corporation bonds. The market price of the bond was $4,000 per bond. 2022 Jan. 5 Sold the Grocers' Supply Corporation bonds for $399,000. Required:1. Prepare the appropriate journal entry or entries for each transaction.2. Indicate any amounts that Rantzow-Lear Company would report in its 2021 balance sheet and income statement as a result of this investment.
- Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2024 and the first week of 2025. December 17, 2024 Purchased 195 Grocers’ Supply Corporation bonds at par for $487,500. December 28, 2024 Received interest of $5,800 from the Grocers’ Supply Corporation bonds. December 31, 2024 Recorded any necessary adjusting entry relating to the Grocers’ Supply Corporation bonds. The market price of the bond was $3,000 per bond. January 5, 2025 Sold the Grocers' Supply Corporation bonds for $546,000. Prepare the appropriate journal entry or entries for each transaction. Indicate any amounts that Rantzow-Lear Company would report in its 2024 balance sheet and income statement as a result of this investment. Ignore income…Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company's fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear's trading account occurred during December 2024 and the first week of 2025. December 17, 2024 Purchased 100 Grocers' Supply Corporation bonds at par for $350,000. December 28, 2024 Received interest of $2,000 from the Grocers' Supply Corporation bonds. December 31, 2024 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market price of the bond was $4,000 per bond. January 5, 2025 Sold the Grocers' Supply Corporation bonds for $395,000. Required: 1. Prepare the appropriate journal entry or entries for each transaction. 2. Indicate any amounts that Rantzow-Lear Company would report in its 2024 balance sheet and income statement as a result of this investment. Ignore income…American Surety and Fidelity buys and sells securities expecting to earn profits on short-term differences in price. For the first 11 months of 2021, gains from selling trading securities totaled $8 million, losses from selling trading securities were $11 million, and the company had earned $5 million in interest revenue. The following selected transactions relate to American's investments in trading securities and equity securities during December 2021, and the first week of 2022. The company's fiscal year ends on December 31. No trading securities or equity investments were held by American on December 1, 2021. Assume that the bonds are purchased at face value. 2021 Dec. 12 Purchased FF&G Corporation bonds for $12 million. 13 Purchased 2 million shares of Ferry Intercommunications common stock for $22 million. American does not have significant influence over Ferry's operations or policies. 15 Sold the FF&G Corporation bonds for $12.1 million. 22 Purchased U.S. Treasury bills for $56…
- Berkshire Co. purchases debt investments in trading securities at a cost of $130 on July 1. (This is its first and only purchase of trading securities.) On December 30, Berkshire received $1 of interest from its trading securities. At year-end December 31, the trading securities had a fair value of $140. a. Prepare the July 1 purchase entry of trading securities. b. Prepare the December 30 entry for receipt of cash interest. c. Prepare the December 31 year-end adjusting entry for the trading securities’ portfolio. d. Explain how each account in entry c is reported in financial statements. e. Prepare the January 3 entry when a portion of its trading securities (that had cost $33) is sold for $36.On January 1, 2017, KLM Company purchased bonds with faceamount of 5,000,000. The entity paid 4,600,000 plus transaction cost of 142,290. The bonds mature on December 31, 2019 and pay 6% interest annually on December 31 of each year with 8% effective yield. The bonds were quoted at 106.5 on December 31, 2017 and 108 on December 31, 2018. Assume that the business model in managing financial asset is to collect contractual cash flows that are solely for payment of principal and interest and also to sell the bonds in an open market. What is the balance of unrealized gain-OCI on December 31, 2017?6 7 8 10 October 02, 2024 Fair value adjustment Investment in bonds November 01, 202 Investment in bonds Cash December 31, 202 Investment in bonds Gain on investments (unrealized, OCI) December 31, 202 Gain on investments (unrealized, OCI) Investment in bonds December 31, 202 Interest receivable Interest revenue Besplat Xxx x 425,000 1,400,000 50,000 x 60,000 x 30,000 X Required 2 > 25,000 x 1,400,000 50,000 X 60,000 X 30,000 x
- The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2024. The company buys debt securities, not intending to profit from short-term differences in price and not necessarily to hold debt securities to maturity, but to have them available for sale in years when circumstances warrant. Ornamental's fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2023. March 31 Acquired 6% Distribution Transformers Corporation bonds costing $540,000 at face value. September 1 Acquired $1,110,000 of American Instruments' 8% bonds at face value. September 30 Received semiannual interest payment on the Distribution Transformers bonds. October 2 Sold the Distribution Transformers bonds for $579,000. November 1 Purchased $1,560,000 of M&D Corporation 4% bonds at face value. December 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are: American…Help Save & Exit Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated's investment activities during the last quarter of 2021 and the first month of 2022. The only securities held by Amalgamated at October 1, 2021 were $35 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1, 2021 at face value and held in Amalgamated's trading securities portfolio. The company's fiscal year ends on December 31. 2021 Oct. 18 Purchased 2 million shares of Millwork Ventures Company common stock for $55 million. Millwork has a total of 32 million shares issued. 31 Received semiannual interest of $2.1 million from the Kansas Abstractors bonds. 1 Purchased 10% bonds of Holistic Entertainment Enterprises at their $18 million face value, to be held until they mature in 2031. Semiannual interest is payable April 30…Van Rushing Hunting Goods’ fiscal year ends on December 31. At the end of the 2021 fiscal year, the company had notes payable of $13.5 million due on February 8, 2022. Rushing sold 4.5 million shares of its $0.25 par, common stock on February 3, 2022, for $11.7 million. The proceeds from that sale along with $1.8 million from the maturation of some 3-month CDs were used to pay the notes payable on February 8. Through his attorney, one of Rushing’s construction workers notified management on January 5, 2022, that he planned to sue the company for $1 million related to a work-site injury on December 20, 2021. As of December 31, 2021, management had been unaware of the injury, but reached an agreement on February 23, 2022, to settle the matter by paying the employee’s medical bills of $80,000. Rushing’s financial statements were finalized on March 3, 2022. Required:1. What amount(s) if any, related to the situations described should Rushing report among current liabilities in its balance…