Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 15, Problem 8QS
1.
To determine
Prepare
2.
To determine
Prepare the journal entry to record the year-end
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
During the current year, Reed Consulting acquired long-term available-for-sale debt securities on July 1 at a $70,000 cost. At its December 31 year-end, these securities had a fair value of $58,000. This is the first and only time the company purchased such securities. 1. Prepare the July 1 entry to record the purchase of these debt securities. 2. Prepare the year-end adjusting entry related to these securities.
During the current year, Reed Consulting acquired long-term available-for-sale debt securities on July 1 at a $76,000 cost. At its
December 31 year-end, these securities had a fair value of $63,400. This is the first and only time the company purchased such
securities.
1. Prepare the July 1 entry to record the purchase of these debt securities.
2. Prepare the year-end adjusting entry related to these securities.
View transaction list
Journal entry worksheet
1
2
Record purchase of available-for-sale securities.
Note: Enter debits before credits.
Date
July 01
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
Journ Co. purchased short-term investments in available-for-sale debt securities at a cost of $51,700 cash on November 25. At December 31, these securities had a fair value of $50,400. This is the first and only time the company has purchased such securities. 1. 2. & 3. Prepare the November 25 entry to record the purchase of debt securities, the December 31 year-end adjusting entry for the securities' portfolio, and the April 6 entry when Journ sells 11% of these securities ($5,687 cost) for $6,700 cash.
Record purchase of available-for-sale securities.
Date
General Journal
Debit
Credit
Nov. 25
Record the year-end adjustment to fair value, if any.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
Dec. 31
Record sale of 11% of available-for-sale securities.
Note: Enter debits before…
Chapter 15 Solutions
Principles of Financial Accounting.
Ch. 15 - Prob. 1MCQCh. 15 - Prob. 2MCQCh. 15 - Prob. 3MCQCh. 15 - Prob. 4MCQCh. 15 - Prob. 5MCQCh. 15 - Prob. 1DQCh. 15 - Prob. 2DQCh. 15 - Prob. 3DQCh. 15 - Prob. 4DQCh. 15 - Under what conditions should investments be...
Ch. 15 - Prob. 6DQCh. 15 - Prob. 7DQCh. 15 - Prob. 8DQCh. 15 - Prob. 9DQCh. 15 - Prob. 10DQCh. 15 - Prob. 11DQCh. 15 - Prob. 12DQCh. 15 - Refer to Googles statement of comprehensive income...Ch. 15 - Prob. 14DQCh. 15 - Which of the following statements are true of...Ch. 15 - Prob. 2QSCh. 15 - Prob. 3QSCh. 15 - Kitty Company began operations in the current year...Ch. 15 - Refer to the information in QS 15-4. (1) After the...Ch. 15 - Prob. 6QSCh. 15 - Prob. 7QSCh. 15 - Prob. 8QSCh. 15 - Prob. 9QSCh. 15 - Prob. 10QSCh. 15 - Prob. 11QSCh. 15 - Prepare Tiker Companys journal entries to record...Ch. 15 - Prob. 13QSCh. 15 - Prob. 14QSCh. 15 - Prob. 15QSCh. 15 - Prob. 16QSCh. 15 - Prob. 17QSCh. 15 - Prob. 18QSCh. 15 - Debt and equity securities and short- and...Ch. 15 - Prob. 2ECh. 15 - Prepare Natura Co.s journal entries to record the...Ch. 15 - Prob. 4ECh. 15 - On December 31, Lujack Co. held the following...Ch. 15 - Prob. 6ECh. 15 - Prob. 7ECh. 15 - Prob. 8ECh. 15 - Prob. 9ECh. 15 - Prob. 10ECh. 15 - Prob. 11ECh. 15 - Prob. 12ECh. 15 - Prob. 13ECh. 15 - Selected accounts from GermX Co.s adjusted trial...Ch. 15 - Prob. 15ECh. 15 - Use the following information of Prescrip Co. to...Ch. 15 - Prob. 17ECh. 15 - Prob. 1APCh. 15 - Mead Inc. began operations in Year 1. Following is...Ch. 15 - Stoll Co.s long-term available-for-sale portfolio...Ch. 15 - Rose Company had no short-term investments prior...Ch. 15 - Prob. 5APCh. 15 - Prob. 6APCh. 15 - Prob. 1BPCh. 15 - Paris Inc. began operations in Year 1. Following...Ch. 15 - Troys long-term available-for-sale portfolio at...Ch. 15 - Prob. 4BPCh. 15 - Prob. 5BPCh. 15 - Prob. 6BPCh. 15 - Prob. 15SPCh. 15 - Prob. 1AACh. 15 - Prob. 2AACh. 15 - Prob. 3AACh. 15 - Prob. 1BTNCh. 15 - Prob. 2BTNCh. 15 - Prob. 3BTNCh. 15 - Prob. 5BTN
Knowledge Booster
Similar questions
- Soto Industries Inc. is an athletic footware company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Soto Industries Inc., which has a fiscal year ending on December 31: Instructions 1. Journalize the entries to record these transactions. 2. If the bond portfolio is classified as available for sale, what impact would this have on financial statement disclosure?arrow_forwardRekya Mart Inc. is a general merchandise retail company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Rekya Mart Inc., which has a fiscal year ending on December 31: Instructions 1. Journalize the entries to record these transactions. 2. If the bond portfolio is classified as available for sale, what impact would this have on financial statement disclosure?arrow_forwardJourn Co. purchased short-term investments in available-for-sale debt securities at a cost of $50,000 cash on November 25. At December 31, these securities had a fair value of $47,000. This is the first and only time the company has purchased such securities. 1. Prepare the November 25 entry to record the purchase of debt securities. 2. Prepare the December 31 year-end adjusting entry for the securities’ portfolio. 3. Prepare the April 6 entry when Journ sells 10% of these securities ($5,000 cost) for $6,000 cash.arrow_forward
- In the current year, Wally Incorporated purchased debt investments of Olson Company with a cost of $11,400 and a year-end fair value of $14,000. This debt investment is classified as held-to-maturity and this is Wally Incorporated's first and only purchase of such securities. The journal entry to record any necessary fair value adjustment to this held-to-maturity debt security as of its December 31 year-end is:arrow_forwardOn February 15, Jewel Company buys bonds of Marcelo Corp. for $201,700. The investment is classified as available-for-sale securities. This is the company’s first and only investment in available-for-sale securities. On December 31, the bonds had a fair value of $203,700. The entry to record the year-end adjustment is:arrow_forwardIn its first year of operations, Carla Vista Corporation purchased available-for-sale debt securities costing $64,000 as a long-term investment. At December 31, 2022, the fair value of the securities is $59,600. Prepare the adjusting entry to record the securities at fair value. (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.) Date Account Titles and Explanation Dec. 31 e Textbook and Media Debit Credit SUPPORTarrow_forward
- 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.arrow_forwardBrooks Co. purchases debt investments as trading securities at a cost of $66,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $72,000. 1. Prepare the December 27 entry for the purchase of debt investments. 2. Prepare the December 31 year-end fair value adjusting entry for the trading securities’ portfolio. 3. Prepare the January 3 entry when Brooks sells a portion of its trading securities (costing $3,000) for $4,000 cash.arrow_forwardIn its first year of operations, Sandhill Corporation purchased, as a long-term investment, available-for-sale debt securities costing $70,000. At December 31, 2020, the fair value of the securities is $65,000.Prepare the adjusting entry to record the securities at fair value. (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 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31arrow_forward
- Gard Company completes the following transactions related to its short-term debt investments. May 8 Purchased FedEx notes as a short-term investment in available-for-sale securities for $12,975. Sep. 2 Sold part of its investment in FedEx notes for $4,475, which had cost $4,325. Oct. 2 Purchased Ajay bonds for $25,600 as a short-term investment in available-for-sale securities.arrow_forwardCurrent Attempt in Progress In its first year of operations, Sheridan Corporation purchased available-for-sale debt securities costing $68,500 as a long-term investment. At December 31, 2022, the fair value of the securities is $63.650. Prepare the adjusting entry to record the securities at fair value. (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.) Date Dec. 31 Account Titles and Explanation Debit Creditarrow_forwardBerkshire 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.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning