Exercise 12-12 (Algo) Available-for-sale securities; financial statement effects [LO12-1, 12-4]Colah Company purchased $2,300,000 of Jackson, Incorporated, 6% bonds at par on July 1, 2024, with Interestpaid semi-annually. Colah determined that it should account for the bonds as an available-for-sale Investment. AtDecember 31, 2024, the Jackson bonds had a fair value of $2,630,000. Colah sold the Jackson bonds on July 1,2025 for $2,070,000.Required:1. Prepare Colah's Journal entries for the following transactions:a. The purchase of the Jackson bonds on July 1.b. Interest revenue for the last half of 2024.c. Any year-end 2024 adjusting entries.d. Interest revenue for the first half of 2025.e. Any entries necessary upon sale of the Jackson bonds on July 1, 2025, Including updating the fair-valueadjustment, recording any reclassification adjustment, and recording the sale.2. Complete the following table to show the effect of the Jackson bonds on Colah's net income, othercomprehensive Income, and comprehensive Income for 2024, 2025, and cumulatively over 2024 and 2025.Complete this question by entering your answers in the tabs below.Required 1 Required 2Prepare Colah's journal entries for the following transactions:a. The purchase of the Jackson bonds on July 1.b. Interest revenue for the last half of 2024.c. Any year-end 2024 adjusting entries.d. Interest revenue for the first half of 2025.e. Any entries necessary upon sale of the Jackson bonds on July 1, 2025, including updating the fair-value adjustment, recreclassification adjustment, and recording the sale.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter yourwhole dollars, and not in millions.View transaction listJournal entry worksheet1 2 3 4567

Securities or bonds which are available for sale have a different approach of recording which is the…

Colah Company purchased $2,300,000 of Jackson, Incorporated, 6% bonds at par on July 1, 2024, with Interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale Investment. At December 31, 2024, the Jackson bonds had a fair value of $2,630,000. Colah sold the Jackson bonds on July 1, 2025 for $2,070,000. Required: 1. Prepare Colah's Journal entries for the following transactions: a. The purchase of the Jackson bonds on July 1. b. Interest revenue for the last half of 2024. c. Any year-end 2024 adjusting entries. d. Interest revenue for the first half of 2025. e. Any entries necessary upon sale of the Jackson bonds on July 1, 2025, Including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale.

Colah Company purchased $2,300,000 of Jackson, Incorporated, 6% bonds at par on July 1, 2024, with Interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale Investment. At December 31, 2024, the Jackson bonds had a fair value of $2,630,000. Colah sold the Jackson bonds on July 1, 2025 for $2,070,000. Required: 1. Prepare Colah's Journal entries for the following transactions: a. The purchase of the Jackson bonds on July 1. b. Interest revenue for the last half of 2024. c. Any year-end 2024 adjusting entries. d. Interest revenue for the first half of 2025. e. Any entries necessary upon sale of the Jackson bonds on July 1, 2025, Including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale.

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

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 2E: Held-to-Maturity Securities and Amortization of a Discount On January 1, 2019, Kelly Corporation...

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(Appendix 14.1)Pamlico Company has a 500,000, 15%, 3-year note dated January 1, 2019, payable to Forest National Bank. On December 31, 2020, the bank agreed to settle the note and unpaid interest of 75,000 for 50,000 cash and marketable securities having a current market value of 375,000. Pamlicos acquisition cost of the securities is 385,000. Ignoring income taxes, what amount should Pamlico report as a gain from the debt restructuring on its 2020 income statement? a. 65,000 b. 75,000 c. 140,000 d. 150,000
Transfer between Categories On December 31, 2018, Leslie Company held an investment in bonds of Kaufmann Company which it categorized as being held to maturity. At that time, the 8%, 100,000 face value bonds had a carrying value of 107,023.56 and were being amortized using the effective interest method based on a market rate of 7%. Interest on these bonds is paid annually each December 31. On December 31, 2019, after recording the interest earned, Leslie decided to reclassify the Kaufmann bonds to its available-for-sale category in anticipation of a major restructuring. At that time, the ending quoted market price for the bonds was 105,000. Required: Prepare the journal entries on December 31, 2019, to record the interest earned and the reclassification.
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Refer to the information in RE13-5. Assume that on June 30, Aggie received interest on the Smith Corporation bonds. Prepare the June 30 journal entries to record the receipt of the interest. On April 30, 2019, Aggie Corporation purchased Smith Corporation 10%, 5-years bonds with a face value of 12,000 at par plus four months of accrued interest. Prepare the April 30 journal entry to record the purchase of these available-for-sale securities.
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