Live Large Inc. had the following transactions involving non-strategic investments during 2020.2020 Apr.1 Paid $119,000 to buy a 90-day term deposit, $119,000 principal amount, 7.0%, dated April 1. 12 Purchased 4,900 common shares of Blue Balloon Ltd. at $22.50.June9 Purchased 3,700 common shares of Purple Car Corp. at $51.50. 20 Purchased 1,650 common shares of Yellow Tech Ltd. at $16.00.July1 Purchased for $86,894 a 9.0%, $84,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 8.4%. Interest is paid semiannually beginning December 31, 2020. Live Large Inc. plans to hold this investment until maturity. 3 Received a cheque for the principal and accrued interest on the term deposit that matured on June 30. 15 Received a $0.95 per share cash dividend on the Blue Balloon Ltd. common shares. 28 Sold 2,450 of the Blue Balloon Ltd. common shares at $26.25.Sept.1 Received a $3.00 per share cash dividend on the Purple Car Corp. common shares.Dec.15 Received a $1.40 per share cash dividend on the remaining Blue Balloon Ltd. common shares owned. 31 Received the interest on the Space Explore Inc. bond. 31 The fair values of Live Large Inc.’s investments on this date were Blue Balloon shares, $26.50; Purple Car Corp. shares, $44.25; Yellow Tech shares, $20.80. Assume the fair value and the carrying value of the Space Explore bond were equal.2021 Feb.16 Sold the remaining Blue Balloon shares at $27.00.1. Prepare an amortization schedule for the Space Explore bond showing only 2020 and 2021 (Round your intermediate and final answers to 2 decimals, and use 365 days in a year) (Image included) 2. Record the purchase of a 7.0% term deposit as short term investment (April 01, 2020) (Use 365 days in a year)3. Record the purchase of short term investment (April 12, 2020) (Use 365 days) CashPeriodPremiumUnamortizedInterestInterestCarrying ValueAmort.PremiumReceivedIncomeJuly 1/20Dec. 31/20June 30/21Dec. 31/21

Investments are done by companies to earn extra income in the form of interest on the residual funds…

Answered: Live Large Inc. had the following…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter5: Internal Control And Cash

Section: Chapter Questions

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Live Large Inc. had the following transactions involving non-strategic investments during 2020.

2020
Apr.	1	Paid $119,000 to buy a 90-day term deposit, $119,000 principal amount, 7.0%, dated April 1.
	12	Purchased 4,900 common shares of Blue Balloon Ltd. at $22.50.
June	9	Purchased 3,700 common shares of Purple Car Corp. at $51.50.
	20	Purchased 1,650 common shares of Yellow Tech Ltd. at $16.00.
July	1	Purchased for $86,894 a 9.0%, $84,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 8.4%. Interest is paid semiannually beginning December 31, 2020. Live Large Inc. plans to hold this investment until maturity.
	3	Received a cheque for the principal and accrued interest on the term deposit that matured on June 30.
	15	Received a $0.95 per share cash dividend on the Blue Balloon Ltd. common shares.
	28	Sold 2,450 of the Blue Balloon Ltd. common shares at $26.25.
Sept.	1	Received a $3.00 per share cash dividend on the Purple Car Corp. common shares.
Dec.	15	Received a $1.40 per share cash dividend on the remaining Blue Balloon Ltd. common shares owned.
	31	Received the interest on the Space Explore Inc. bond.
	31	The fair values of Live Large Inc.’s investments on this date were Blue Balloon shares, $26.50; Purple Car Corp. shares, $44.25; Yellow Tech shares, $20.80. Assume the fair value and the carrying value of the Space Explore bond were equal.
2021
Feb.	16	Sold the remaining Blue Balloon shares at $27.00.

1. Prepare an amortization schedule for the Space Explore bond showing only 2020 and 2021 (Round your intermediate and final answers to 2 decimals, and use 365 days in a year) (Image included)

2. Record the purchase of a 7.0% term deposit as short term investment (April 01, 2020) (Use 365 days in a year)

3. Record the purchase of short term investment (April 12, 2020) (Use 365 days)

Cash
Period
Premium
Unamortized
Interest
Interest
Carrying Value
Amort.
Premium
Received
Income
July 1/20
Dec. 31/20
June 30/21
Dec. 31/21

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