Debt Investment Transactions, Available-for-Sale Valuation Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Rekya Mart Inc., which has a fiscal year ending on December 31: Year 1 Apr. 1. Purchased $78,000 of Smoke Bay 4%, 10-year bonds at their face amount plus accrued interest of $520. The bonds pay interest semiannually on February 1 and August 1. May 16. Purchased $120,000 of Geotherma Co. 6%, 12-year bonds at their face amount plus accrued interest of $300. The bonds pay interest semiannually on May 1 and November 1. Aug. 1. Received semiannual interest on the Smoke Bay bonds. Sept. 1. Sold $31,200 of Smoke Bay bonds at 104 plus accrued interest of $104. Nov. 1. Received semiannual interest on the Geotherma Co. bonds. Dec. 31 Accrued $624 interest on Smoke Bay bonds. Dec. 31 Accrued $600 interest on Geotherma Co. bonds. Year 2 Feb. 1. Received semiannual interest on the Smoke Bay bonds. May 1. Received semiannual interest on the Geotherma Co. bonds
Debt Investment Transactions, Available-for-Sale Valuation Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Rekya Mart Inc., which has a fiscal year ending on December 31: Year 1 Apr. 1. Purchased $78,000 of Smoke Bay 4%, 10-year bonds at their face amount plus accrued interest of $520. The bonds pay interest semiannually on February 1 and August 1. May 16. Purchased $120,000 of Geotherma Co. 6%, 12-year bonds at their face amount plus accrued interest of $300. The bonds pay interest semiannually on May 1 and November 1. Aug. 1. Received semiannual interest on the Smoke Bay bonds. Sept. 1. Sold $31,200 of Smoke Bay bonds at 104 plus accrued interest of $104. Nov. 1. Received semiannual interest on the Geotherma Co. bonds. Dec. 31 Accrued $624 interest on Smoke Bay bonds. Dec. 31 Accrued $600 interest on Geotherma Co. bonds. Year 2 Feb. 1. Received semiannual interest on the Smoke Bay bonds. May 1. Received semiannual interest on the Geotherma Co. bonds
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter15: Investments And Fair Value Accounting
Section: Chapter Questions
Problem 1PB: Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, Year 1....
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Debt Investment Transactions, Available-for-Sale Valuation
Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Rekya Mart Inc., which has a fiscal year ending on December 31:
Year 1 | |
Apr. 1. | Purchased $78,000 of Smoke Bay 4%, 10-year bonds at their face amount plus accrued interest of $520. The bonds pay interest semiannually on February 1 and August 1. |
May 16. | Purchased $120,000 of Geotherma Co. 6%, 12-year bonds at their face amount plus accrued interest of $300. The bonds pay interest semiannually on May 1 and November 1. |
Aug. 1. | Received semiannual interest on the Smoke Bay bonds. |
Sept. 1. | Sold $31,200 of Smoke Bay bonds at 104 plus accrued interest of $104. |
Nov. 1. | Received semiannual interest on the Geotherma Co. bonds. |
Dec. 31 | Accrued $624 interest on Smoke Bay bonds. |
Dec. 31 | Accrued $600 interest on Geotherma Co. bonds. |
Year 2 | |
Feb. 1. | Received semiannual interest on the Smoke Bay bonds. |
May 1. | Received semiannual interest on the Geotherma Co. bonds. |
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