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.Prepare journal entries1. Record fair value adjustment (Dec 31, 2020)2. Record the sale of investment (Feb 16, 2021)3. Show how Live Large Inc.’s investments will appear on its December 31, 2020, balance sheet. (Image included) LIVE LARGE INC.Partial Balance SheetDecember 31, 2020AssetsCurrent Investments:Non current investments:

Answered: Live Large Inc. had the following…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 76E

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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.

Prepare journal entries

1. Record fair value adjustment (Dec 31, 2020)

2. Record the sale of investment (Feb 16, 2021)

3. Show how Live Large Inc.’s investments will appear on its December 31, 2020, balance sheet. (Image included)

LIVE LARGE INC.
Partial Balance Sheet
December 31, 2020
Assets
Current Investments:
Non current investments:

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