Live Large Inc. had the following transactions involving non-strategic investments during 2023. 2023 Apr. 1 Paid $107,050 to buy a 90-day term deposit, $107,000 principal amount, 6.0%, dated April 1. There was a $50 transaction fee included in the above-noted payment amount. 12 Purchased 3,700 common shares of Blue Balloon Ltd. at $24.00. There was a $50 transaction fee included in the above-noted payment amount. June 9 Purchased 2,500 common shares of Purple Car Corp. at $50.50. There was a $50 transaction fee included in the above-noted payment amount. 20 Purchased 1,050 common shares of Yellow Tech Ltd. at $17.50. There was a $50 transaction fee included in the above-noted payment amount. July 1 Purchased for $74,574 a 8.0 %, $72,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 7.4%. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually beginning December 31, 2023. Live Large Inc. plans to hold this investment until maturity. 3 Received a cheque for the principal and accrued interest on the term deposit that matured on June 30. 15 Received a $0.95 per share cash dividend on the Blue Balloon Ltd. common shares. 28 Sold 1,850 of the Blue Balloon Ltd. common shares at $27.75.
Live Large Inc. had the following transactions involving non-strategic investments during 2023. 2023 Apr. 1 Paid $107,050 to buy a 90-day term deposit, $107,000 principal amount, 6.0%, dated April 1. There was a $50 transaction fee included in the above-noted payment amount. 12 Purchased 3,700 common shares of Blue Balloon Ltd. at $24.00. There was a $50 transaction fee included in the above-noted payment amount. June 9 Purchased 2,500 common shares of Purple Car Corp. at $50.50. There was a $50 transaction fee included in the above-noted payment amount. 20 Purchased 1,050 common shares of Yellow Tech Ltd. at $17.50. There was a $50 transaction fee included in the above-noted payment amount. July 1 Purchased for $74,574 a 8.0 %, $72,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 7.4%. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually beginning December 31, 2023. Live Large Inc. plans to hold this investment until maturity. 3 Received a cheque for the principal and accrued interest on the term deposit that matured on June 30. 15 Received a $0.95 per share cash dividend on the Blue Balloon Ltd. common shares. 28 Sold 1,850 of the Blue Balloon Ltd. common shares at $27.75.
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter15: Investments And Fair Value Accounting
Section: Chapter Questions
Problem 28E
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Transcribed Image Text:2. Prepare journal entries to record the preceding transactions. (Round your intermediate and final answers to the nearest whole
dollar amount. Use 365 days in a year.)
View transaction list View journal entry worksheet
1 Record the purchase of 6.0% term deposit as short-term 1
investment.
2 Record the purchase of short-term investment.
3 Record the purchase of short-term investment.
4 Record the purchase of short-term investment.
s Record the purchase of a 8.0%, 8-year bond.
6 Record the collection of term deposit and interest earned.
7 Record the collection of dividend income.
Note: ● - journal entry has been entered
6 Record the collection of term deposit and interest earned.
7 Record the collection of dividend income.
8 Record the sale of short-term investment.
9 Record the collection of dividend income.
10 Record the collection of dividend income.
11 Record the collection of interest on the bond.
12 Record fair value adjustment.
13 Record the sale of investment.
Note: - Journal entry has been entered
Record entry
Assets
LIVE LARGE INC.
Partial Balance Sheet
December 31, 2023
Current Investments
Clear entry
Non-current investments:
13
Credit
Debit
3. Show how Live Large Inc.'s Investments will appear on its December 31, 2023, balance sheet. (Round your intermediate and final
answers to the nearest whole dollar amount.)
View general journal
>
Credit
Transcribed Image Text:Live Large Inc. had the following transactions involving non-strategic investments during 2023.
2023
Apr. 1 Paid $107,050 to buy a 90-day term deposit, $107,000 principal amount, 6.0%, dated April 1. There was a $50 transaction
fee included in the above-noted payment amount.
12 Purchased 3,700 common shares of Blue Balloon Ltd. at $24.00. There was a $50 transaction fee included in the above-noted
payment amount.
June 9 Purchased 2,500 common shares of Purple Car Corp. at $50.50. There was a $50 transaction fee included in the above-noted
payment amount.
20 Purchased 1,050 common shares of Yellow Tech Ltd. at $17.50. There was a $50 transaction fee included in the above-noted
payment amount.
July 1 Purchased for $74,574 a 8.0%, $72,000 Space Explore Inc. bond that matures in eight years when the market interest rate
was 7.4%. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually
beginning December 31, 2023. Live Large Inc. plans to hold this investment until maturity.
3 Received a cheque for the principal and accrued interest on the term deposit that matured on June 30.
15 Received a $0.95 per share cash dividend on the Blue Balloon Ltd. common shares.
28 Sold 1,850 of the Blue Balloon Ltd. common shares at $27.75.
Sept. 1 Received a $2.80 per share cash dividend on the Purple Car Corp. common shares.
Dec. 15 Received a $1.40 per share cash dividend on the remaining Blue Balloon Ltd. common shares owned.
31 Received the interest on the Space Explore Inc. bond.
31 The fair values of Live Large Inc.'s investments on this date were Blue Balloon shares, $25.30; Purple Car Corp. shares,
$43.05; Yellow Tech shares, $17.80. Assume the fair value and the carrying value of the Space Explore bond were equal.
Feb. 16 Sold the remaining Blue Balloon shares at $28.00.
2024
Required:
1. Prepare an amortization schedule for the Space Explore bond showing only 2023 and 2024. (Round your intermediate and final
answers to the nearest whole dollar amount. Enter all the amounts as positive values. Use 365 days in a year.)
July 1/23
Dec. 31/23
June 30/24
Dec. 31/24
Cash
Interest
Received
Period
Interest
Income
Premium Unamortized
Amort.
Premium
Carrying Value
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