Bramble Corporation purchases equity securities costing $ 66,200. At December 31, the fair value of the portfolio is $ 58,100. Prepare the adjusting entry to report the securities properly, assuming that the investments purchased represent less than a 5% interest in the other companies. (Cr
Q: On January 1, Valuation Allowance for Trading Investments had a zero balance. On December 31, the…
A: Adjusting entries are made to accurately allocate income and expenditures to each accounting…
Q: Use the following information for the next two questions. PINA CO. carries the following marketable…
A: All financial instruments held for sale are recognized at FVOCI and the instruments held for trading…
Q: The following information is available for Stellar Company at December 31, 2020, regarding its…
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…
Q: Prepare the December 31 adjusting journal entry to record the unrealized gain or loss on trading…
A: Trading securities: These are short-term investments in debt and equity securities with an intention…
Q: 2.) Beez Corporation purchased trading investment bonds for $53,000 at par. At December 31, Bonita…
A: Given that, Purchase value of investment bond = $53,000 Annual interest = $2120 fair value of the…
Q: On January I of Year 1, Steve Company purchased the following securities. Security Type…
A: An unrealized gain is an increase in the value of an asset or investment that an investor holds but…
Q: Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained…
A: Available for sale securities are the securities purchased with an intent to sell before their…
Q: (a) Assuming no Fair Value Adjustment account balance at the beginning of the year, prepare the…
A: Required journal entry is: Date Particulars Debit ($) Credit ($) Unrealised holding gain or…
Q: Flounder Corporation purchased trading investment bonds for $59,000 at par. At December 31, Flounder…
A: Solution: Journal entries of Flounder is as under:
Q: Blossom Corporation purchased trading investment bonds for $ 53,000 at par. At December 31, Blossom…
A: Here in this question, we are required to pass entry for trading investment in bonds. Trading…
Q: On October 1, 2018, North Co. invested excess cash of $80,000 by purchasing bonds of South Inc. At…
A: Adjusting entries are prepared at the end of the accounting period in order to ensure the accrual…
Q: The following selected transactions relate to investment activities of Ornamental Insulation…
A: Bonds are the securities issued by the company to take investment from the public in the form of…
Q: On January 1, Valuation Allowance for Trading Investments had a zero balance. On December 31, the…
A: Prepare adjusting entry for valuation of trading securities transaction.
Q: Hurricane Inc. purchased a portfolio of available-for-sale securities in Year 1, its first year of…
A: Available-for-sale securities: These are short-term or long-term investments in debt and equity…
Q: Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term…
A: 1.
Q: Satchel Corporation purchases equity securities costing $73,000. At December 31, the fair value of…
A: Compute the unrealized holding gain (loss) as on December 31.
Q: On December 31, Lujack Co. held the following short-term available-for-sale securities. Lujack had…
A: Calculation of fair value adjustment:
Q: Gruden Bancorp Inc. purchased a portfolio of trading securities during Year 1. The cost and fair…
A: a.Journalize the stock investment transactions in the books of Company C:
Q: Midwest Bank invests in equity securities. At the beginning of December 2019, the bank held no…
A: Unrealized gains and losses: These are gains and losses which are unrealized and are the result of…
Q: Victory, Inc. is a manufacturer and retailer of household furniture. Your audit of the company’s…
A: There are two types of liabilities.
Q: Cheyenne Corporation purchases equity securities costing $150,900 and classifies them as…
A: Unrealized holding gain = $154,700 - $150,900 = $3,800
Q: Kaman Company paid $165,000 to purchase a portfolio of debt investments on March 1, 2020. Managem…
A: IN Accounting concept of double entry system. double entry system means a transaction affect two…
Q: Oriole Corporation has municipal bonds classified as a held-to-maturity at December 31, 2020. These…
A: Impairment loss = $835,000 - $754,000 = $81,000
Q: At December 31, 2020, the cost and fair value trading securities for Crane, Inc. are as follows.…
A: The trading securities were decreased In value from its cost. The unrealized loss = Total Fair…
Q: The following selected transactions relate to investment activities of Ornamental Insulation…
A: Available for sale securities refer to those securities purchased by a business entity for the…
Q: Bonneau Company had the following transactions relating to investments in available-for-sale…
A: Journal Entry is the primary step to record the transaction in the books of account. Journal entry…
Q: digo Corporation purchased trading investment bonds for $64,000 at par. At December 31, Indigo…
A: Step 1 Journal is the part of Book Keeping.
Q: Midwest Bank invests in equity securities. At the beginning of December 2019, the bank held no…
A: Solution:- 1)Preparation of journal entries to record the preceding information as follows:- Working…
Q: Journ Co. purchased short-term investments in available-for-sale debt securities at a cost of…
A:
Q: Rogers Corporation carries an account in its general ledger called Investments, which contained the…
A: Available for sale securities are the securities purchased with an intent to sell before their…
Q: Teal Corporation has outstanding 1,900 $1,000 bonds, each convertible into 70 shares of $10 par…
A:
Q: In its first year of operations, Sandhill Corporation purchased available-for-sale debt securıties…
A: When Available for sale securities are purchased, the record is made in fair value. The difference…
Q: Komissarov Company has a debt investment in the bonds issued by Keune Inc. The bonds were purchased…
A: Given information is: Komissarov Company has a debt investment in the bonds issued by Keune Inc. The…
Q: Victory, Inc. is a manufacturer and retailer of household furniture. Your audit of the company’s…
A: A financial statement is prepared by the management of the corporation to identify the efficiency in…
Q: On January 1, Valuation Allowance for Trading Investments had a zero balance. On December 31, the…
A: Trading securities: These are short-term investments in debt and equity securities with an intention…
Q: Midwest Bank invests in equity securities. At the beginning of December 2019, the bank held no…
A: Part(1) In the Books of M Bank Journal Entries Date Particulars Debit ($) Credit ($)…
Q: Midwest Bank invests in equity securities. At the beginning of December 2019, the bank held no…
A: Journal entry: It is prepared to record the financial and non-financial transactions of the business…
Q: On December 31, the bonds had a fair value of $203,700. The entry to record the year-end adjustment…
A: At the time of reporting period, the gain or loss on holding the bond should be accounted. If the…
Q: The investments of Charger Inc. include an investment of trading securities of Raiders Inc.…
A: Unrealized gain = $288,000 - $216,000 = $72,000
Q: Prepare Tiker Company's journal entries to record the following transactions and the adjusting entry…
A: Journal entry refers to the recording of business transactions initially into books of accounts.…
Q: (Equity Securities Entries and Reporting) Satchel Corporation purchases equity securities costing…
A: Securities at fair value, December 31 $ 65,000 Less: Securities, at cost price $ -73,000…
Q: On January 1, 2020, Waterway Corporation purchased 40% of the common shares of Wildhorse Company for…
A: Solution: Journal Entries S. no. Account title and explanation Debit Credit 1) Investment…
Q: On December 31, 2020, Petra Company invests $42,000 in Valery, a variable interest entity. In…
A: A balance sheet is a financial statement that depicts a company's assets, liabilities, and…
Q: Midwest Bank invests in equity securities. At the beginning of December 2019, the bank held no…
A: The following are journal entries to record the purchase of equity securities in cash: Investment in…
Q: On January 1, 2020, Ayayai Corporation purchased 20% of the common shares of Pina Company for…
A: Share in dividend = total dividend paid x 20% = 17750*20% = $3550
Q: Stuart Corp. purchased $80,000 of Dumb Co. bonds and $120,000 of Silly Inc. bonds. Both investments…
A: Trading securities are always and recorded at fair value. Any change in book value and fair value of…
Q: In the following two independent cases, the company closes its books on December 31: 1. Splish…
A: Note: As per our guidelines, we are supposed to answer the first question only. Please post the…
Q: On January 1, Valuation Allowance for Available-for-Sale Investments had a zero balance. On December…
A: Unrealized loss on Available-For-Sale investments = cost - fair value = $78,400 - $72,330 = $6,070
Q: Victory, Inc. is a manufacturer and retailer of household furniture. Your audit of the company's…
A: Current liabilities are defined as the short term financial obligations of the company which are due…
Q: Carla Corporation purchased trading investment bonds for $50,000 at par. At December 31, Carla…
A: Journal entries refer to the recording of transactions in an appropriate way. With the help of…
Prepare the
Account Titles and Explanation
|
Debit
|
Credit
|
|
|
|
|
|
|
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Cheyenne Corporation purchases equity securities costing $150,900 and classifies them as available-for-sale securities. At December 31, the fair value of the portfolio is $154,700.Prepare the adjusting entry to report the securities properly. (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.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amountIn 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. 31Satchel Corporation purchases equity securities costing $73,000. At December 31, the fair value of the portfolio is $65,000. Instructions Prepare the adjusting entry to report the securities properly, assuming that the investments purchased represent less than a 5% interest in the other companies. Indicate the statement presentation of the accounts in your entry.
- Flounder Corporation purchased trading investment bonds for $59,000 at par. At December 31, Flounder received annual interest of $2,360, and the fair value of the bonds was $56,500.Prepare Flounder' journal entries for (a) the purchase of the investment, (b) the interest received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (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.) No. Account Titles and Explanation Debit Credit (a) enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (b) enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (c) enter an account title enter a debit amount…Blossom Corporation purchased trading investment bonds for $ 53,000 at par. At December 31, Blossom received annual interest of $ 2,120, and the fair value of the bonds was $ 50,500.Prepare Blossom' journal entries for (a) the purchase of the investment, (b) the interest received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (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.) No. Account Titles and Explanation Debit Credit (a) enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (b) enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (c) enter an account title enter a debit amount…The following information is available for Stellar Company at December 31, 2020, regarding its investments. Securities Cost Fair Value 500 shares of Runner Corporation common stock $25,000 $39,000 7,200 shares of Sher-tor Corporation preferred stock 659,000 626,000 $684,000 $665,000 (a) Prepare the adjusting entry (if any) for 2020, assuming the securities are classified as trading. (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.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (b) Prepare the adjusting entry (if any) for 2020, assuming the securities are classified as available-for-sale. (Credit account titles are automatically…
- 2.) Beez Corporation purchased trading investment bonds for $53,000 at par. At December 31, Bonita received annual interest of $2,120, and the fair value of the bonds was $50,500.Prepare journal entries for (a) the purchase of the investment, (b) the interest received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (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.) No. Account Titles and Explanation Debit Credit (a) enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (b) enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (c) enter an account title enter a debit amount enter a…On June 1, 2019, Hansen Company purchased ten $1,000 Francisco Company bonds at par and classified them as held-to-maturity. In 2020, Francisco experienced financial difficulties and on Dec 31, 2020, based on an evaluation of the investment, Hansen determined that expected credit losses are $4,000. In 2021, Francisco improved its financial condition, and, on Dec 31, 2021, Hansen believed that expected credit losses would only be $2,000. Required: Prepare the journal entries for Hansen to record the above events under U.S. GAAP.During the month, Blue, Inc. purchased 1,050 shares for $7.00 per share and classified them as trading investments. At the end of the month, the price of the securities was $11.25 per share. What adjusting entry, if any, will Blue, Inc. record when it closes its books at the end of the month to reflect this change in value?ᐧ a Dr. Valuation Allowance for Trading Investments $11,812.50 Cr. Unrealized Gain on Trading Investments $11,812.50 b Dr. Unrealized Loss on Trading Investment $4,462.50 Cr. Valuation Allowance for Trading Investments $4,462.50 c Dr. Valuation Allowance for Trading Investments $4,462.50 Cr. Unrealized Gain on Trading Investments $4,462.50 Because the trading investments were not sold during the month, no adjusting entry is required. d Dr. Valuation Allowance for Trading Investments $4,462.50 Cr. Realized Gain on Trading Investments $4,462.50
- On January 1, the Valuation Allowance for Trading Investments account has a zero balance. On December 31, the cost of trading securities portfolio was $64,200, and the fair value was $67,000. Prepare the December 31 adjusting journal entry to record the unrealized gain or loss on trading investments (you can attach Excel or Word rather than typing in answer box).On June 1, 2019, Hansen Company purchased twenty $1,000 Francisco Company bonds at par and classified them as held-to-maturity. In 2020, Francisco experienced financial difficulties and on Dec 31, 2020, based on an evaluation of the investment, Hansen determined that expected credit losses are $4,200. In 2021, Francisco improved its financial condition, and, on Dec 31, 2021, Hansen believed that expected credit losses would only be $2,100. Required: Prepare the journal entries for Hansen to record the above events under U.S. GAAP.On December 12, 2021, an investment in equity securities costing $80,000 was sold for $100,000. The total of the sale proceeds was credited to the investment in equity securities account.Required:1. Prepare the journal entry to correct the error, assuming it is discovered before the books are adjusted or closed in 2021. (Ignore income taxes.)2. Prepare the journal entry to correct the error assuming it is not discovered until early 2022. (Ignore income taxes.)