Intermediate Accounting: Reporting and Analysis, 2017 Update
2nd Edition
ISBN: 9781337116619
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 13, Problem 9E
1.
To determine
Prepare the
2.
To determine
Show how Bank S would report its trading securities at its income statement of the fourth quarter ended December 31, 2016.
3.
To determine
Show how Bank S would report its trading securities at its
4.
To determine
Explain the justification given by FASB for its treatment of unrealized holding gains and losses for trading securities.
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Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2021 and the first week of 2022.
2021
Dec.
17
Purchased 180 Grocers’ Supply Corporation bonds at par for $450,000.
28
Received interest of $5,200 from the Grocers’ Supply Corporation bonds.
31
Recorded any necessary adjusting entry relating to the Grocers’ Supply Corporation bonds. The market price of the bond was $3,000 per bond.
2022
Jan.
5
Sold the Grocers' Supply Corporation bonds for $513,000.
Required:1. Prepare the appropriate journal entry or entries for each transaction.2. Indicate any amounts that Rantzow-Lear Company would report in its 2021 balance sheet and income statement as a result of this investment.
The following transactions were completed by Winklevoss Inc., whose fiscal
year is the calendar year:
2016
July 1. Issued $74,000,000 of 20-year, 11% callable bonds dated July 1,
2016, at a market (effective rate of 13%, receiving cash of $63,532,267.
Interest is payable semiannually on December 31 and June 30.
October 1. Borrowed $200,000 by issuing a six-year, 6% installment note to
Nicks Bank. The note requires annual payments of $40,673, with the first
payment occurring on September 30, 2017.
December 31. Accrued $3,000 of interest on the installment note. The
interest is payable on the date of the next installment note payment.
December 31. Paid the semiannual interest on the bonds. The bond discount
amortization of $261,693 is combined with the semiannual interest payment.
Retrieved from:
Warren, C. S., Reeve, J. M., & Duchac, J. (2016). Accounting (26 ed.). Boston, MA: Cengage Learning.
December 31. Closed the interest expense account.
2017
June 30. Paid the semiannual interest…
BUSINESS ACCOUNTING
On March 1, 2011, Fast Freight Company
sold Rs. 400,000 of its 9 percent, 20-year
bonds at 109.9. The semiannual interest
payment dates are March 1 and September
1. The market interest rate is 8 percent. The
firm's fiscal year ends August 31. Prepare
entries in journal form to record the sale
of the bonds on March 1, the accrual of
interest and amortization of premium on
August 31, and the first inferest payment
September 1. Use the effective interest
method to anmortize the premium.
Expert Answer o
Chapter 13 Solutions
Intermediate Accounting: Reporting and Analysis, 2017 Update
Ch. 13 - Prob. 1GICh. 13 - Provide brief definitions for the following terms:...Ch. 13 - Prob. 3GICh. 13 - Prob. 4GICh. 13 - Prob. 5GICh. 13 - Briefly summarize the accounting for an investment...Ch. 13 - Prob. 7GICh. 13 - Prob. 8GICh. 13 - Prob. 9GICh. 13 - Prob. 10GI
Ch. 13 - Prob. 11GICh. 13 - Prob. 12GICh. 13 - Prob. 13GICh. 13 - Prob. 14GICh. 13 - Briefly describe how to determine and record the...Ch. 13 - Prob. 16GICh. 13 - Prob. 17GICh. 13 - Prob. 18GICh. 13 - Prob. 19GICh. 13 - How does IFRS categorize minority passive...Ch. 13 - Prob. 21GICh. 13 - Prob. 22GICh. 13 - Prob. 23GICh. 13 - Prob. 24GICh. 13 - Prob. 25GICh. 13 - Prob. 26GICh. 13 - Prob. 27GICh. 13 - What is a fund? Distinguish between a fund and an...Ch. 13 - Prob. 29GICh. 13 - Prob. 30GICh. 13 - On January 1, 2016, Weaver Company purchased as...Ch. 13 - Prob. 2MCCh. 13 - Prob. 3MCCh. 13 - Prob. 4MCCh. 13 - Prob. 5MCCh. 13 - Prob. 6MCCh. 13 - A security in a portfolio of available-for-sale...Ch. 13 - Prob. 8MCCh. 13 - Cash dividends declared out of current earnings...Ch. 13 - Prob. 10MCCh. 13 - Prob. 1RECh. 13 - Prob. 2RECh. 13 - Prob. 3RECh. 13 - Prob. 4RECh. 13 - Prob. 5RECh. 13 - Prob. 6RECh. 13 - Prob. 7RECh. 13 - Prob. 8RECh. 13 - Prob. 9RECh. 13 - Prob. 10RECh. 13 - Prob. 11RECh. 13 - Prob. 12RECh. 13 - Prob. 13RECh. 13 - On January 1, Kilgore Inc. accepts a 20,000...Ch. 13 - Prob. 15RECh. 13 - Prob. 16RECh. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Prob. 7ECh. 13 - Prob. 8ECh. 13 - Prob. 9ECh. 13 - Prob. 10ECh. 13 - Prob. 11ECh. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Prob. 14ECh. 13 - Prob. 15ECh. 13 - Prob. 16ECh. 13 - Prob. 17ECh. 13 - Prob. 18ECh. 13 - Prob. 19ECh. 13 - Prob. 20ECh. 13 - Prob. 21ECh. 13 - Prob. 22ECh. 13 - Prob. 23ECh. 13 - Prob. 24ECh. 13 - Prob. 25ECh. 13 - Prob. 26ECh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Prob. 5PCh. 13 - Prob. 6PCh. 13 - Trading Securities 8th State Bank prepares interim...Ch. 13 - Available-for-Sale Securities Holly Company...Ch. 13 - Investments in Equity Securities Noonan...Ch. 13 - Available-for-Sale Investments Manson Incorporated...Ch. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Prob. 14PCh. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Prob. 19PCh. 13 - Prob. 20PCh. 13 - Prob. 21PCh. 13 - Prob. 22PCh. 13 - Prob. 23PCh. 13 - Prob. 1CCh. 13 - Investments in Securities Cane Company has two...Ch. 13 - Prob. 3CCh. 13 - Prob. 4CCh. 13 - Available-for-Sale Securities The following are...Ch. 13 - Prob. 6CCh. 13 - Prob. 7CCh. 13 - Prob. 8CCh. 13 - Prob. 9CCh. 13 - Prob. 10C
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