Akers Company invests its excess cash in marketable securities. At the beginning of 2019, it had the following portfolio of investments in trading debt securities: Security Par Value Amortized Cost 12/31/18 Fair Value Ivan Company 5% bonds, maturing on Dec. 31, 2028 $10,000 $8,400 $9,400 Taylor Company 6% bonds, maturing on Dec. 31, 2023 $40,000 $43,200 $41,800 Totals $51,600 $51,200 During 2019, the following transactions occurred: Mar. 31 Purchased Hill Company 8% bonds with a face value of $20,000 for $20,000 plus accrued interest; interest is payable on the bonds each June 30 and December 31. Mar. 31 Sold the Taylor Company investment for $42,000 plus accrued interest. The Taylor bonds pay interest on December 31 of each year. June 30 Received the semiannual interest on the Hill Company bonds. Dec. 31 Received the annual interest on the Ivan Company bonds and the semiannual interest on the Hill Company bonds. The December 31 closing market prices were as follows: Ivan Company bonds, $9,000; and Hill Company 8% bonds $20,100. Akers uses the straight-line method to amortize any discounts or premiums. Required: 1. Prepare journal entries to record the preceding information.
Akers Company invests its excess cash in marketable securities. At the beginning of 2019, it had the following portfolio of investments in trading debt securities: Security Par Value Amortized Cost 12/31/18 Fair Value Ivan Company 5% bonds, maturing on Dec. 31, 2028 $10,000 $8,400 $9,400 Taylor Company 6% bonds, maturing on Dec. 31, 2023 $40,000 $43,200 $41,800 Totals $51,600 $51,200 During 2019, the following transactions occurred: Mar. 31 Purchased Hill Company 8% bonds with a face value of $20,000 for $20,000 plus accrued interest; interest is payable on the bonds each June 30 and December 31. Mar. 31 Sold the Taylor Company investment for $42,000 plus accrued interest. The Taylor bonds pay interest on December 31 of each year. June 30 Received the semiannual interest on the Hill Company bonds. Dec. 31 Received the annual interest on the Ivan Company bonds and the semiannual interest on the Hill Company bonds. The December 31 closing market prices were as follows: Ivan Company bonds, $9,000; and Hill Company 8% bonds $20,100. Akers uses the straight-line method to amortize any discounts or premiums. Required: 1. Prepare journal entries to record the preceding information.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 21E: Mills Company had five convertible securities outstanding during all of 2019. It paid the...
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Akers Company invests its excess cash in marketable securities. At the beginning of 2019, it had the following portfolio of investments in trading debt securities:
| Security | Par Value | Amortized Cost | 12/31/18 Fair Value |
| Ivan Company 5% bonds, maturing on Dec. 31, 2028 | $10,000 | $8,400 | $9,400 |
| Taylor Company 6% bonds, maturing on Dec. 31, 2023 | $40,000 | $43,200 | $41,800 |
| Totals | $51,600 | $51,200 |
During 2019, the following transactions occurred:
| Mar. 31 | Purchased Hill Company 8% bonds with a face value of $20,000 for $20,000 plus accrued interest; interest is payable on the bonds each June 30 and December 31. |
| Mar. 31 | Sold the Taylor Company investment for $42,000 plus accrued interest. The Taylor bonds pay interest on December 31 of each year. |
| June 30 | Received the semiannual interest on the Hill Company bonds. |
| Dec. 31 | Received the annual interest on the Ivan Company bonds and the semiannual interest on the Hill Company bonds. |
The December 31 closing market prices were as follows: Ivan Company bonds, $9,000; and Hill Company 8% bonds $20,100. Akers uses the straight-line method to amortize any discounts or premiums.
Required:
| 1. | Prepare |
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