TWA made the following investments during 2012 : 1/15/2012 – Purchased 1,000 shs of IBM stock...

TWA made the following investments during 2012 :

1/15/2012 – Purchased 1,000 shs of IBM stock for $ 2,410

2/01/2012 – Purchased 50,000 IBM bonds , 10%, for 52,100

5/15/2012 – Sold 600 shs of IBM stock for $ 3/ share

8/1/2012 – Received semi-annual interest on the IBM Bonds

8/1/2012 – Sold 30,000 IBM Bonds for 30,800.

12/31/2012 – Accrued interest on the remaining IBM Bonds;

to journal entries and to record the various transactions

Solutions

Expert Solution

Journal Entries in the books of TWA for the year 2012

Date	Particulars	Amount Dr($)	Amount Cr($)
15/01/2012	Investment in IBM shares a/c Dr To Bank a/c (Being purchase of 1000 stock of IBM for $2.41/share)	2410	2410
01/02/2012	10% IBM bonds a/c Dr To Bank a/c (Being purchase of 50000 10% bonds of IBM for $52100)	52100	52100
15/05/2012	Bank a/c Dr To Investment in IBM Shares To Profit on sale of shares (Being 600 IBM shares sold at $3/share)	1800	1446 354
01/08/2012	Bank a/c Dr To Interest on IBM bonds (Interest on IBM bonds received semi annually)	2250	2250
01/08/2012	Bank a/c Dr Loss on IBM Bonds Dr To 10% IBM Bonds (Being 30000 IBM bonds sold for $30800 which were originally purchasesd for 31260 )(52100/50000*30000)	30800 460	31260
31/12/2012	10% IBM Bonds a/c Dr To Interest on IBM Bonds (Being Interest accrued on 20000 IBM bonds for 5 months accounted)	833	833

ekkarill92 answered 2 years ago

Next > < Previous

Related Solutions

Bob owns 1,000 shares of IBM that he acquired in 2012 for a cost of $35,000....

Bob owns 1,000 shares of IBM that he acquired in 2012 for a cost of $35,000. Bob buys 10 of the IBM calls (IBM 75 July 20, 2018 @$4). Chang sells 10 IBM calls (IBM 75 July 20, 2018 @$4). Chang also owns 1,000 shares of IBM that she purchased in 2016 for $27,000. On July 20, IBM is trading for $80 per share so all of the options are exercised. What are the taxable results to both Bob and...

C has the following investments it bought during 2012. C still owns the stocks as of...

C has the following investments it bought during 2012. C still owns the stocks as of 12-31-14. Original Fair Value Cost 12-31-12 12-31-13 12-31-14 Jungle stock $20,000 $21,000 $24,000 $27,000 Regal stock $40,000 $41,000 $35,000 $42,000 Evan stock $14,000 $15,000 $17,000 $13,000 Leia stock $36,000 $37,000 $55,000 None of the stocks pay C a dividend. On 04-14-14, C sold all...

Feherty, Inc., accounts for its investments under IFRS No. 9 and purchased the following investments during...

Feherty, Inc., accounts for its investments under IFRS No. 9 and purchased the following investments during December 2021: One hundred and thirty of Donald Company’s $1,000 bonds. The bonds pay semiannual interest, return principal in 10 years, and include no other cash flows or other features. Feherty plans to hold 20 of the bonds to collect contractual cash flows over the life of the investment and to hold 110, both to collect contractual cash flows but also to sell them...

Feherty, Inc., accounts for its investments under IFRS No. 9 and purchased the following investments during...

Feherty, Inc., accounts for its investments under IFRS No. 9 and purchased the following investments during December 2021: Two hundred and fifty of Donald Company’s $1,000 bonds. The bonds pay semiannual interest, return principal in 10 years, and include no other cash flows or other features. Feherty plans to hold 100 of the bonds to collect contractual cash flows over the life of the investment and to hold 150, both to collect contractual cash flows but also to sell them...

Feherty, Inc., accounts for its investments under IFRS No. 9 and purchased the following investments during...

Feherty, Inc., accounts for its investments under IFRS No. 9 and purchased the following investments during December 2021: One hundred of Donald Company’s $1,000 bonds. The bonds pay semiannual interest, return principal in 10 years, and include no other cash flows or other features. Feherty plans to hold 20 of the bonds to collect contractual cash flows over the life of the investment and to hold 80, both to collect contractual cash flows but also to sell them if their...

You purchased a call option on IBM stock 3 months ago for a price (premium) of $1.

You purchased a call option on IBM stock 3 months ago for a price (premium) of $1. The option has a 6-month expiration and a strike price of $146. You decided to exercise the option today when IBM stock is trading at $147. This means that _________________You sold an IBM stock today for $1.You bought an IBM stock today for $146.You bought an IBM stock today for $147.You sold an IBM stock today for $146.

Place Company purchased 92% of the common stock of Shaw, Inc. on January 1, 2012, for...

Place Company purchased 92% of the common stock of Shaw, Inc. on January 1, 2012, for $402,800. Trial balances at the end of 2012 for the companies were: Place Shaw Cash $80,400 $86,400 Accounts and Notes Receivable 200,600 206,900 Inventory, 1/1 70,400 49,000 Investment in Shaw, Inc. 402,800 —0— Plant Assets 295,800 197,400 Dividends Declared 34,900 21,700 Purchases 238,100 149,200 Selling Expenses 27,700 20,000 Other Expenses 15,300 12,800 $1,366,000 $743,400 Accounts and Notes Payable $97,800 $37,700 Other Liabilities 45,600 15,100...

On January 1, 2012, Parker Company purchased 90% of the outstanding common stock of Sid Company...

On January 1, 2012, Parker Company purchased 90% of the outstanding common stock of Sid Company for $180,000. At that time, Sid’s stockholders’ equity consisted of common stock, $120,000; other contributed capital, $20,000; and retained earnings, $25,000. Assume that any difference between book value of equity and the value implied by the purchase price is attributable to land. On December 31, 2012, the two companies’ trial balances were as follows: Parker Sid Cash $65,000 $35,000 Accounts Receivable 40,000 30,000 Inventory...

Problem Place Company purchased 92% of the common stock of Shaw, Inc. on January 1, 2012,...

Problem Place Company purchased 92% of the common stock of Shaw, Inc. on January 1, 2012, for $402,800. Trial balances at the end of 2012 for the companies were: Place Shaw Cash $80,400 $86,400 Accounts and Notes Receivable 200,600 206,900 Inventory, 1/1 70,400 49,000 Investment in Shaw, Inc. 402,800 —0— Plant Assets 295,800 197,400 Dividends Declared 34,900 21,700 Purchases 238,100 149,200 Selling Expenses 27,700 20,000 Other Expenses 15,300 12,800 $1,366,000 $743,400 Accounts and Notes Payable $97,800 $37,700 Other Liabilities 45,600...

On January 1, 2012, P Company purchased 95% of the outstanding common stock of S Company...

On January 1, 2012, P Company purchased 95% of the outstanding common stock of S Company for $160,000. At that time, Sessions' stockholders' equity consisted of common stock, $120,000; other contributed capital, $10,000; and retained earnings, $23,000. Any difference between the implied value of the company and the book value is attributable to goodwill. On December 31, 2012, the two companies' trial balances were as follows: P S Cash 62,000 30,000 Accounts Receivable 32,000 29,000 Inventory...

Subjects