The us government bonds were sold on july 1 2013 for 120810

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Reference no: EM13574824

Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions.

Feb. 1, 2012	Sharapova Company common stock, $101 par, 202 shares	$38,500
April 1	U.S. government bonds, 10%, due April 1, 2022, interest payable April 1 and October 1, 113 bonds of $1,000 par each	113,000
July 1	McGrath Company 12% bonds, par $55,400, dated March 1, 2012, purchased at 104 plus accrued interest, interest payable annually on March 1, due March 1, 2032	59,832

(a) Prepare entries necessary to classify the amounts into proper accounts, assuming that all the securities are classified as available-for-sale. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

(b) Prepare the entry to record the accrued interest and the amortization of premium on December 31, 2012, using the straight-line method. (Round answers to 0 decimal places, e.g. $2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

Sharapova Company common stock		$35,070
U.S. government bonds		145,500
McGrath Company bonds		63,900

What entry or entries, if any, would you recommend be made? (Round answers to 0 decimal places, e.g. $2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

(d) The U.S. government bonds were sold on July 1, 2013, for $120,810 plus accrued interest. Give the proper entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

Reference no: EM13574824

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