Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price.The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’strading account occurred during December 2018 and the first week of 2019.2018Dec. 17 Purchased 100 Grocers’ Supply Corporation bonds at par for $350,000.28 Received interest of $2,000 from the Grocers’ Supply Corporation bonds.31 Recorded any necessary adjusting entry relating to the Grocers’ SupplyCorporation bonds. The market price of the stock was $4,000 per bond.2019Jan. 5 Sold the Grocers’ Supply Corporation bonds for $395,000.Required:1. Prepare the appropriate journal entry for each transaction.2. Indicate any amounts that Rantzow-Lear Company would report in its 2018 balance sheet and income statement as a result of this investment.
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price.
The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s
trading account occurred during December 2018 and the first week of 2019.
2018
Dec. 17 Purchased 100 Grocers’ Supply Corporation bonds at par for $350,000.
28 Received interest of $2,000 from the Grocers’ Supply Corporation bonds.
31 Recorded any necessary
Corporation bonds. The market price of the stock was $4,000 per bond.
2019
Jan. 5 Sold the Grocers’ Supply Corporation bonds for $395,000.
Required:
1. Prepare the appropriate
2. Indicate any amounts that Rantzow-Lear Company would report in its 2018 balance sheet and income statement as a result of this investment.
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