FINANCIAL AND MANAGERIAL ACCOUNTING
13th Edition
ISBN: 9781337816045
Author: WARREN
Publisher: CENGAGE L
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Chapter 13, Problem 2EX
a)
To determine
Bond investment:
Bond investments are debt securities which pay fixed interest revenue to the investor.
Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.
Debit and credit rules:
- Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in
stockholders’ equity accounts. - Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.
To Prepare: journal entry for purchase of $220,000 5% bonds of Corporation J at face value.
(b)
To determine
To Prepare: journal entry for accrued interest.
(c)
To determine
To Prepare: journal entry to record the interest revenue received.
(d)
To determine
To Prepare: journal entry for $80,000 bonds sold at 103%.
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Torres Investments acquired $233,600 of Murphy Corp., 6% bonds at their face amount on October 1, Year 1. The bonds pay interest on October 1 and April 1. On April 1, Year 2, Torres sold $111,200 of Murphy Corp. bonds at 105.
Journalize the entries to record the following (refer to the Chart of Accounts for exact wording of account titles):
a.
The initial acquisition of the Murphy Corp. bonds on October 1, Year 1.
b.
The adjusting entry for three months of accrued interest earned on the Murphy Corp. bonds on December 31, Year 1.
c.
The receipt of semiannual interest on April 1, Year 2.
d.
The sale of $111,200 of Murphy Corp. bonds on April 1, Year 2, at 105.
Entries for bond (held-to-maturity) investments
Bula Investments acquired $264,000 of Effenstein Corp., 9% bonds at their face amount on October 1, 20Y1. The bonds pay interest on October 1 and April 1. On April 1, 20Y2, Bula sold $118,000 of Effenstein Corp. bonds at 104.
Journalize the entries to record the following selected transactions:
a. The initial acquisition of the Effenstein Corp. bonds on October 1, 20Y1.
b. The adjusting entry for 3 months of accrued interest earned on the Effenstein Corp. bonds on December 31, 20Y1.
c. The receipt of semiannual interest on April 1, 20Y2.
d. The sale of $118,000 of Effenstein Corp. bonds on April 1, 20Y2, at 104.
e. The receipt of the face value of the remaining bonds at their maturity on October 1, 20Y8.
Entries for bond (held-to-maturity) investments
Demopoulos Company acquired $203,400 of Marimar Co., 7% bonds on May 1 at their face amount. Interest is paid semiannually on
May 1 and November 1. On November 1, Demopoulos Company sold $44,400 of the bonds for 99.
Journalize the entries to record the following:
If an amount box does not require an entry, leave it blank.
a. The initial acquisition of the bonds on May 1.
May 1
b. The s
Nov. 1
Cash
Nov. 1
Interest Receivable
Interest Revenue
Investments-Marimar Co. Bonds
c. The sNotes Receivable
lovember 1.
d. The accrual of $1,855 interest on December 31.
Chapter 13 Solutions
FINANCIAL AND MANAGERIAL ACCOUNTING
Ch. 13 - Prob. 1DQCh. 13 - What causes a gain or loss on the sale of a bond...Ch. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - What are the factors contributing to the trend...Ch. 13 - Prob. 10DQ
Ch. 13 - Prob. 1APECh. 13 - Bond investment transactions Journalize the...Ch. 13 - Prob. 2APECh. 13 - Stock investment transactions On September 12,...Ch. 13 - Prob. 3APECh. 13 - Prob. 3BPECh. 13 - Prob. 4APECh. 13 - Prob. 4BPECh. 13 - Prob. 5APECh. 13 - Prob. 5BPECh. 13 - Prob. 6APECh. 13 - Prob. 6BPECh. 13 - Prob. 1EXCh. 13 - Prob. 2EXCh. 13 - Prob. 3EXCh. 13 - Prob. 4EXCh. 13 - Prob. 5EXCh. 13 - Entries for investment in stock, receipt of...Ch. 13 - Prob. 7EXCh. 13 - Prob. 8EXCh. 13 - Entries for stock investments, dividends, and sale...Ch. 13 - Prob. 10EXCh. 13 - Prob. 11EXCh. 13 - Prob. 12EXCh. 13 - Prob. 13EXCh. 13 - Prob. 14EXCh. 13 - Prob. 15EXCh. 13 - Prob. 16EXCh. 13 - Fair value journal entries, trading investments...Ch. 13 - Prob. 18EXCh. 13 - Prob. 19EXCh. 13 - Prob. 20EXCh. 13 - Prob. 21EXCh. 13 - Prob. 22EXCh. 13 - Prob. 23EXCh. 13 - Prob. 24EXCh. 13 - Prob. 25EXCh. 13 - Prob. 26EXCh. 13 - Prob. 27EXCh. 13 - Prob. 28EXCh. 13 - Prob. 29EXCh. 13 - Debt investment transactions, available-for-sale...Ch. 13 - Prob. 2APRCh. 13 - Stock investment transactions, equity method and...Ch. 13 - Prob. 4APRCh. 13 - Prob. 1BPRCh. 13 - Prob. 2BPRCh. 13 - Stock investment transactions, equity method and...Ch. 13 - Prob. 4BPRCh. 13 - Selected transactions completed by Equinox...Ch. 13 - Benefits of fair value On July 16, 1998, Wyatt...Ch. 13 - Prob. 2CPCh. 13 - Prob. 3CPCh. 13 - Prob. 4CP
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