Present journal entries to record the following selected

Assignment Help Accounting Basics

Reference no: EM13482838

1. Journalize the entries to record the following selected bond investment transactions for Southwest Bank:
1. Purchased for cash $400,000 of Daytona Beach 5% bonds at 100 plus accrued interest of $4,500
2. Received first semiannual interest
3. Sold $250,000 of the bonds at 97 plus accrued interest of $1,800.

2. On Jan 1 2010, Valuation Allowance for Trading Investment has a credit balance of $8,700. On Dec 31,2010 the cost of trading securities portfolio was $52,400 , and the fair value was $53,000.

Required: Prepare the December 31, 2010 adjusting journal entry to record the unrealized gain or loss on trading investments.

3. On March 1 2010, Chase Inc. purchased $60,000 of 10 year 8% bonds on their issuance date directly from Manus Corporation at $51,600 as a held to maturity investment. What adjusting entry would Chase make to record amortization of discount on December 31, 2010 using the STRAIGHT LINE METHOD?

4. On June 30, 2009 Airport Company issued $1,500,000 of 10 year, 8% bonds, dated June 30, for $1,540,000. The bonds were purchased by Paxton Co. on the issue price. Present entries to record the following transactions"

(a) Airport Company
(1) Issuance of bonds
(2) Payment of first semiannual interest on December 31, 2009
(3) Amortization by STRAIGHT-LINE METHOD of bond premium on December 31, 2009

(b) PAXTON Co.
(1) Purchase of bonds
(2) Receipt of first semiannual interest amount on December 31 2009
(3)) Amortization by straight-line method of bonds premium on December 31, 2009.

5. Present journal entries to record the following selected transactions of Masterson Corporation:(a) Purchased 600 shares of the 100,00 shares outstanding $10 par common shares of Dankin Corporation for $5,100

(b) Purchased 3500 shares of the 10,000 shares no par common shares of Ramon Co. for $45,700. The investment was accounted for by the EQUITY METHOD

(d) Reveived a cash dividend of $2 par share on the Ramon Co. stock acquired in (b)

(e) Sold 100 share s of the Dankin Corporation shares acquired in (a) for $2,100

(f) Recorded the appropriate share of Ramon Company's net income of $50,000. The stock was acquired in (b).

Reference no: EM13482838

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