r. Pinkberry Co. reported total earnings of $240,000. Equinox Products recorded its share of Pinkberry Co. netincome using the equity method.DescriptionDebitCredits. The Solstice Corp. bonds have a fair value of $253,630 on December 31, 2OY5. Valuation Allowance forAvailable-for-Sale Investments had a balance of zero on January 1, 20Y5.DescriptionDebitCreditFeedback

Journal entry: Journal entry is a set of economic events which can be measured in financial terms.…

Answered: the equity method. Description Debit ce…

the equity method. Description Debit ce Corp. bonds have a fair value of $253,630 on December 31, 20Y5. Valuation Allo Sale Investments had a balance of zero on January 1. 20Y5.

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 1PA: Soto Industries Inc. is an athletic footware company that began operations on January 1, Year 1. The...

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On September 1, Indigo Corporation had the following investments classified as held for trading purposes: $71,000,6% FMC Co, bond, purchased previously by indigo at 101. Interest on the bond is payable semi-annually on January 1 and July 13 $130,000 3% Government of Canada bond, previously purchased by indigo at 98. interest on the bond is payable semi-annually on March 31, and September 30. During the month of September, the following transactions took places Sept. 1: Sept. 30 Sept. 30 Sept. 30 Purchased $63,000 4% Alpha inc. bond at 99. Interest is payable annually on August 31. Received interest on Government of Canada bond. Data Sold the Government of Canada bond at 97. Fair value on FMC Co. bond is $74,550 and fair value of Alpha Inc. bond is $61,740. Record the transactions that occurred in September and prepare any adjusting entries required at September 30. indigo Corporation is a public company and has a September 30 year end. (Credit account titles are automatically indented…
Banaba Company had the following transactions in bond investment held as trading for the current year. Mar.1 Purchased 1,000 P1,000, 12% bonds of Lander Company at 90 excluding accrued interest. Interest is payable on February 1 and August 1. Apr. 1 Purchased 3,000, P1,000, 12% bonds of Narita Corporation at 92 plus accrued interest. Interest is payable March 1 and September 1. Oct. 1 Sold 500 of Narita bonds at 102 excluding accrued interest. Dec. 1 Sold all of the Lander bonds at 95 plus accrued interest 31 The market value of the Narita bonds is 90. Required; Prepare journal entries to record the transactions including receipt and accrued interest.
Tamarisk Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions. F-b. 1.2025 July 1 (a) (5) Sharapova Company common stock, $100 par, 200 shares U.S. government bonds, 11%, due April 1, 2035, interest payable April 1 and October 1, 108 bonds of 31000 par cách McGrath Company 12% bonds, par $54,100, dated March 1, 2025, purchased at 104 plus accrued interest, interest payable annually on March 1, due March 1, 2045 Your answer is partially correct. Prepare the entry to record the accrued interest and the amortization of premium on December 31, 2025, using the straight-line method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. Ifna entry is required, select "No Entry for the account titles and enter Ofor the amounts. Round answers to 0 decimal places. 5.19251 Date Account Titles and…
The following information relates to the debt securities investments of Sunland Company. 1. On February 1, the company purchased 10% bonds of Gibbons Co. having a par value of $324,000 at 100 plus accrued interest. Interest is payable April 1 and October 1. 2. On April 1, semiannual interest is received. 3. On July 1, 9% bonds of Sampson, Inc. were purchased. These bonds with a par value of $186,000 were purchased at 100 plus accrued interest. Interest dates are June 1 and December 1. 4. On September 1, bonds with a par value of $60,000, purchased on February 1, are sold at 99 plus accrued interest. 5. On October 1, semiannual interest is received. 6. On December 1, semiannual interest is received. 7. On December 31, the fair value of the bonds purchased February 1 and July 1 are 95 and 93, respectively. (a)Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale securities.…
Pharoah Company had the following transactions pertaining to debt securities held as an investment. Jan. 1 Dec. 31 Purchased 75, 6%, $1,000 Sheridan Company bonds for $75,000 cash. Interest is payable annually on January 1. Accrued $4,500 annual interest on Sheridan Company bonds. Journalize the purchase and the receipt of interest. Assume no interest has been accrued. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Jan. 1 Debt Investments Cash Dec. 31 Interest Receivable Interest Revenue Debit 75,000 4,500 Credit 75,000 4,500
The following selected information are made available by AAA company for the current year: Accounts Payable120,000 Bonds Payable 800,000 Warranty payable200,000 Total Liabilities1,300,000 Net Sales1,650,000 Total Assets2,200,000 In the common size statement of financial position, prepaid expense will have a proportional percentage of bonds payable? The total Noncurrent asset of CAM Company is P1,000,000 and the Equity is 1,200,000. The company has no liabilities during the period. If cash and cash equivalent is 500,000, what will be its proportional percentage in the common-size statement of financial position?
The following information relates to the debt securities investments of Wildcat Company. 1. On February 1, the company purchased 10% bonds of Gibbons Co. having a par value of $300,000 at 100 plus accrued interest. Interest is payable April 1 and October 1. 2. On April 1, semiannual interest is received. 3. On July 1, 9% bonds of Sampson, Inc. were purchased. These bonds with a par value of $200,000 were purchased at 100 plus accrued interest. Interest dates are June 1 and December 1. 4. On September 1, bonds with a par value of $60,000, purchased on February 1, are sold at 99 plus accrued interest. 5. On October 1, semiannual interest is received. 6. On December 1, semiannual interest is received. 7. On December 31, the fair value of the bonds purchased February 1 and July 1 are 95 and 93, respectively. Instructions a. Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale securities. b. If…
The following information relates to the debt investments of Concord Inc. during a recent year: 1. On February 1, the company purchased Gibbons Corp. 10% bonds with a face value of $372,000 at 100 plus accrued interest. Interest is payable on April 1 and October 1. 2. On April 1, semi-annual interest was received on the Gibbons bonds. 3. On June 15, Sampson Inc. 9% bonds were purchased. The $248,000 par-value bonds were purchased at 100 plus accrued interest. Interest dates are June 1 and December 1. 4. On August 31, Gibbons bonds with a par value of $74,400 purchased on February 1 were sold at 99 plus accrued interest. 5. On October 1, semi-annual interest was received on the remaining Gibbons bonds. 6. On December 1, semi-annual interest was received on the Sampson bonds. 7. On December 31, the fair values of the bonds purchased on February 1 and June 15 were 98.5 and 101, respectively. Assume the investments are accounted for under the recognition and measurement requirements of…
Q7- Khalid Corporation had the following transactions relating to debt investments: Jan. 1 Purchased 50, $1,000, 12% Naved Company bonds for $50,000 plus broker's fees of $1,500. Interest is payable semiannually on January 1 and July 1. July 1 Received semiannual interest from Naved Company bonds. July 1 Sold 30 Naved Company bonds for $30,000, less $800 broker's fees. Instructions (a). Journalize the transactions, and (b). prepare the adjusting entry for the accrual of interest on December 31.
G’s investment account relates to its debt investments and its equity investments. For balance sheet presentation, G includes any separate investment-related adjustment accounts with the investment account. Information about G’s investments follows: o On 06-30-21, G purchased 45, $1,000 3% bonds when similar bonds were paying 3.5%. G incurred and paid $600 of bond purchase-related costs. The bonds were dated 06-30-21, pay interest each June 30 and December 31, and mature on 06-30-25. G classified the bonds as a trading investment. As of 12-31-21, the bonds traded at 99. o On 06-30-19, G purchased 40, $1,000 5% bonds when similar bonds were paying 5%. G incurred and paid $400 of bond purchase-related costs. The bonds were dated 06-30-19 and pay interest each June 30 and December 31 and mature on 06-30-24. G classified these bonds as an available-for-sale investment. The bonds were trading at the following amounts as of the following dates:12-31-19 10012-31-20 10212-31-21 101
The following data were taken from the balance sheet accounts of Wildhorse Corporation on December 31, 2024. Current assets Debt investments (trading) Common stock (par value $10) Paid-in capital in excess of par Retained earnings a. b. C. $513,000 605,000 Prepare the required journal entries for the following unrelated items. (List all debit entries before credit entries. Credit account titles are automatically indented when the 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. Record entries in the order displayed in the problem statement.) 501,000 Date 144,000 910,000 A 6% stock dividend is (1) declared and (2) distributed at a time when the market price per share is $40. The par value of the common stock is reduced to $2 with a 5-for-1 stock split. A dividend is declared January 5, 2025, and paid January 25, 2025, in bonds held as an investment. The bonds have a book value of $104,000 and a fair…
Instructions Stuart Corp. purchased $80,000 of Durmb Co, bonds and $120,000 of Silly Inc. bonds. Both investments are classified as trading. As of December 31, the Dumb Co. bonds are selling for $90,000 and the Silly Inc, bonds are selling for $140,000 per share. Stuart had net income of $150,000 before reporting the impact of investment transactions. Required: a. Record the December 31 adjusting entries for investments. b. What is Stuart Corp.'s net income after adjusting for investments? c. What is the appropriate balance sheet presentation for these investments?