oto Industries Inc. is an athletic footware company that began operations on January 1, 20Y3. The following are bond (held-to-maturity) transactions by Soto Industries Inc., which has a fiscal year ending on December 31: Record these transactions on page 10 20Y3 Apr. 1 Purchased $100,000 of Welch Co. 6%, 15-year bonds at their face amount plus accrued interest of $500. The bonds pay interest semiannually on March 1 and September 1. June 1 Purchased $210,000 of Bailey 4%, 10-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on May 1 and November 1. Sept. 1 Received semiannual interest on the Welch Co. bonds. 30 Sold $40,000 of Welch Co. bonds at 97 plus accrued interest of $200. Nov. 1 Received semiannual interest on the Bailey bonds. Dec. 31 Accrued interest on the Welch Co. bonds. 31 Accrued interest on the Bailey bonds. Record these transactions on page 11 20Y4 Mar. 1 Received semiannual interest on the Welch Co. bonds. May 1 Received semiannual interest on the Bailey bonds. Required: 1. Journalize the entries to record these transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Assume 360 days a year. Do not round your intermediate calculations and round final answers to the nearest dollar. 2. If the bond portfolio is classified as an available-for-sale investment, how would it be reported on the financial statements?

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 8E

See similar textbooks

Related questions

Question

Soto Industries Inc. is an athletic footware company that began operations on January 1, 20Y3. The following are bond (held-to-maturity) transactions by Soto Industries Inc., which has a fiscal year ending on December 31:

Record these transactions on page 10

20Y3
Apr.	1	Purchased $100,000 of Welch Co. 6%, 15-year bonds at their face amount plus accrued interest of $500. The bonds pay interest semiannually on March 1 and September 1.
June	1	Purchased $210,000 of Bailey 4%, 10-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on May 1 and November 1.
Sept.	1	Received semiannual interest on the Welch Co. bonds.
	30	Sold $40,000 of Welch Co. bonds at 97 plus accrued interest of $200.
Nov.	1	Received semiannual interest on the Bailey bonds.
Dec.	31	Accrued interest on the Welch Co. bonds.
	31	Accrued interest on the Bailey bonds.

Record these transactions on page 11

20Y4
Mar.	1	Received semiannual interest on the Welch Co. bonds.
May	1	Received semiannual interest on the Bailey bonds.

Required:

Journalize the entries to record these transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Assume 360 days a year. Do not round your intermediate calculations and round final answers to the nearest dollar.

If the bond portfolio is classified as an available-for-sale investment, how would it be reported on the financial statements?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here