Safety Development Corporation had relatively large idle cash balances and invested them as follows in securities to be held as non- strategic investments: 2023 Feb. 7 Purchased 3,100 common shares of Royal Bank at $27.40, plus $500 in transaction fees. 19 Purchased 2,100 common shares of Imperial Oil at $54.00, and paid $250 in transaction fees. Apr. 1 Paid $97,182 plus $500 in transaction fees for a 8.60%, four-year, $99,000 Minco Inc. bond that pays interest quarterly beginning June 30. The market rate of interest on this date was 9.00%. Sellers Corporation plans to Ihold this investment for the duration of the bond's contract life. May 26 Purchased 2,900 common shares of BCE at $14.28, plus $200 in transaction fees. June 1 Received a $0.25 per share cash dividend on the Royal Bank common shares. 17 Sold 2,100 Royal Bank common shares at $27.90. 30 Received interest on the Minco Inc. bond. Aug. 5 Received a $0.50 per share cash dividend on the Imperial Oil common shares. Sept. 1 Received a $0.275 per share cash dividend on the remaining Royal Bank common shares. 30 Received interest on the Minco Inc. bond. Dec. 31 Received interest on the Minco Inc. bond. On December 31, 2023, the fair values of the investments held by Safety Development Corporation were: Royal Bank, $28.40; Imperial Oil, $52.38; and BCE, $14.40. Assume the fair value and carrying value of the Minco Inc. bond were equal. Required: 1. Prepare an amortization schedule for the Minco Inc. bond showing only 2023. (Round your intermediate and final answers to the nearest whole dollar amount. Enter all the amounts as positive values.) Apr. 1/23 June 30/23 Sept 30/23 Dec. 31/23 Cash Interest Received Period Interest Income Discount Amort. Unamortized Discount Carrying Value
Safety Development Corporation had relatively large idle cash balances and invested them as follows in securities to be held as non- strategic investments: 2023 Feb. 7 Purchased 3,100 common shares of Royal Bank at $27.40, plus $500 in transaction fees. 19 Purchased 2,100 common shares of Imperial Oil at $54.00, and paid $250 in transaction fees. Apr. 1 Paid $97,182 plus $500 in transaction fees for a 8.60%, four-year, $99,000 Minco Inc. bond that pays interest quarterly beginning June 30. The market rate of interest on this date was 9.00%. Sellers Corporation plans to Ihold this investment for the duration of the bond's contract life. May 26 Purchased 2,900 common shares of BCE at $14.28, plus $200 in transaction fees. June 1 Received a $0.25 per share cash dividend on the Royal Bank common shares. 17 Sold 2,100 Royal Bank common shares at $27.90. 30 Received interest on the Minco Inc. bond. Aug. 5 Received a $0.50 per share cash dividend on the Imperial Oil common shares. Sept. 1 Received a $0.275 per share cash dividend on the remaining Royal Bank common shares. 30 Received interest on the Minco Inc. bond. Dec. 31 Received interest on the Minco Inc. bond. On December 31, 2023, the fair values of the investments held by Safety Development Corporation were: Royal Bank, $28.40; Imperial Oil, $52.38; and BCE, $14.40. Assume the fair value and carrying value of the Minco Inc. bond were equal. Required: 1. Prepare an amortization schedule for the Minco Inc. bond showing only 2023. (Round your intermediate and final answers to the nearest whole dollar amount. Enter all the amounts as positive values.) Apr. 1/23 June 30/23 Sept 30/23 Dec. 31/23 Cash Interest Received Period Interest Income Discount Amort. Unamortized Discount Carrying Value
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter8: Investing Activities
Section: Chapter Questions
Problem 11QE
Related questions
Question
do not give solution in image format
Transcribed Image Text:View transaction list
2. Prepare journal entries to record the investment activity including the appropriate fair value adjustment on December 31. (Round
your intermediate and final answers to the nearest whole dollar amount.)
Journal entry worksheet
< 1
2
Note: Enter debits before credits.
Date
Feb 07, 2023
Record the purchase of investment.
Assets
Record entry
3
Show Transcribed Text
4
Current Investments:
Non-current investments
5
General Journal
SAFETY DEVELOPMENT CORPORATION
Partial Balance Sheet
December 31, 2023
Clear entry
6
3
7
c
8
Debit
12
3. Show how the investments will be reported on the December 31, 2023, balance sheet. (Round your intermediate and final answers
to the nearest whole dollar amount.)
Credit
View general journal
>
Analysis Component:
f the fair value adjustment is not recorded by Safety Development Corporation, what is the impact on the financial statements?
Transcribed Image Text:Safety Development Corporation had relatively large idle cash balances and invested them as follows in securities to be held as non-
strategic investments:
2023
Feb. 7 Purchased 3,100 common shares of Royal Bank at $27.40, plus $500 in transaction fees.
19 Purchased 2,100 common shares of Imperial Oil at $54.00, and paid $250 in transaction fees.
Apr. 1 Paid $97,182 plus $500 in transaction fees for a 8.60%, four-year, $99,000 Minco Inc. bond that pays interest
quarterly beginning June 30. The market rate of interest on this date was 9.00%. Sellers Corporation plans to
hold this investment for the duration of the bond's contract life.
May 26 Purchased 2,900 common shares of BCE at $14.28, plus $200 in transaction fees.
June 1 Received a $0.25 per share cash dividend on the Royal Bank common shares.
17 Sold 2,100 Royal Bank common shares at $27.90.
30 Received interest on the Minco Inc. bond.
Aug. 5 Received a $0.50 per share cash dividend on the Imperial Oil common shares.
Sept. 1 Received a $0.275 per share cash dividend on the remaining Royal Bank common shares.
30 Received interest on the Minco Inc. bond.
Dec. 31 Received interest on the Minco Inc. bond.
On December 31, 2023, the fair values of the investments held by Safety Development Corporation were: Royal Bank, $28,40; Imperial
Oil, $52.38; and BCE, $14.40. Assume the fair value and carrying value of the Minco Inc. bond were equal.
Required:
1. Prepare an amortization schedule for the Minco Inc. bond showing only 2023. (Round your intermediate and final answers to the
nearest whole dollar amount. Enter all the amounts as positive values.)
Apr. 1/23
June 30/23
Sept 30/23
Dec. 31/23
Cash
Interest
Received
Period Interest
Income-
Discount
Amort.
Unamortized
Discount
Carrying Value
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning