Question
In: Accounting
Kirkland Company had no trading debt securities prior to this year. It had the following transactions...
Kirkland Company had no trading debt securities prior to this
year. It had the following transactions this year involving trading
debt securities.
| Aug. | 2 | Purchased Verizon bonds for $12,000. | ||
| Sept. | 7 | Purchased Apple bonds for $37,000. | ||
| 12 | Purchased Mastercard bonds for $22,000. | |||
| Oct. | 21 | Sold some of its Verizon bonds that had cost $2,100 for $2,200 cash. | ||
| 23 | Sold some of its Apple bonds that had cost $17,000 for $17,400 cash. | |||
| Nov. | 1 | Purchased Walmart bonds for $42,000. | ||
| Dec. | 10 | Sold all of its Mastercard bonds for $20,000 cash. |
Required
1. Prepare journal entries to record these
transactions.
2. Prepare a table to compare the year-end cost
and fair values of its trading debt securities. Year-end fair
values: Verizon, $10,500; Apple, $23,000; and Walmart,
$40,000.
3. Prepare the adjusting entry to record the
year-end fair value adjustment for the portfolio of trading debt
securities.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Kirkland Company had no trading debt securities prior to this year. It had the following transactions...
Kirkland Company had no trading debt securities prior to this
year. It had the following transactions this year involving trading
debt securities.
Aug.
2
Purchased Verizon bonds for $36,000.
Sept.
7
Purchased Apple bonds for $61,000.
12
Purchased Mastercard bonds for $46,000.
Oct.
21
Sold some of its Verizon bonds that had cost $3,300 for $3,400
cash.
23
Sold some of its Apple bonds that had cost $41,000 for $41,400
cash.
Nov.
1
Purchased Walmart bonds for $66,000.
Dec.
10...
Kirkland Company had no trading debt securities prior to this year. It had the following transactions...
Kirkland Company had no trading debt securities prior to this
year. It had the following transactions this year involving trading
debt securities.
Aug.
2
Purchased Verizon bonds for $32,000.
Sept.
7
Purchased Apple bonds for $57,000.
12
Purchased Mastercard bonds for $42,000.
Oct.
21
Sold some of its Verizon bonds that had cost $3,100 for $3,200
cash.
23
Sold some of its Apple bonds that had cost $37,000 for $37,400
cash.
Nov.
1
Purchased Walmart bonds for $62,000.
Dec.
10...
In the first year of operations, Acme Company had the following selected transactions in trading securities....
In the first year of operations, Acme Company had the following
selected transactions in trading securities.
At December 31 the fair market values were $40 for
Staples, Inc. and $30 for Ross, Inc.
Journalize the investment transactions and prepare the
adjusting entry at Dec. 31
June 1: Purchased for cash 600 shares of
Staples, Inc. common stock at $25 per share
July 1: Purchased for cash 800 shares of Ross
Inc. common stock at $35 per share
Sept. 1: Received...
Rose Company had no short-term investments prior to this year. It had the following transactions this...
Rose Company had no short-term investments prior to this year.
It had the following transactions this year involving short-term
stock investments with insignificant influence. Apr. 16 Purchased
8,000 shares of Gem Co. stock at $20.25 per share. July 7 Purchased
4,000 shares of PepsiCo stock at $54.00 per share. 20 Purchased
2,000 shares of Xerox stock at $15.00 per share. Aug. 15 Received
a(n) $0.80 per share cash dividend on the Gem Co. stock. 28 Sold
4,000 shares of Gem...
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving...
Rose Company had no short-term investments prior to year 2017.
It had the following transactions involving short-term investments
in available-for-sale securities during 2017.
Apr.
16
Purchased 8,000 shares of Gem Co.
stock at $25.25 per share plus a $320 brokerage fee.
May
1
Paid $280,000 to buy 3-month U.S.
Treasury bills (debt securities): $280,000 principal amount, 5%
interest, securities mature on July 31.
July
7
Purchased 4,000 shares of PepsiCo
stock at $46.00 per share plus a $290 brokerage fee....
Walter's Inc. began operations on January 15, 2018, and had the following transactions in trading securities...
Walter's Inc. began operations on January 15, 2018, and had the
following transactions in trading securities during 2018 and
2019:
March 1, 2018 Purchased 500 shares of Apex, Inc. common stock at
$11 per share, plus a commission of $300
April 1, 2018 Purchased 1,000 shares of Basic Corp. preferred
stock at $4 per share, plus a commission of $500.
June 1, 2018 Received dividends of $1 per share on the Apex
stock and $2 per share on the Basic...
Investment in Trading and AFS Securities In 2019, a company purchases debt securities at a par...
Investment in Trading and AFS Securities
In 2019, a company purchases debt securities at a par value of
$500,000. Their year-end value is $520,000. In 2020, these
securities are sold for $525,000 and new securities are purchased
for $700,000. At the end of 2020, the securities have not yet been
sold, and have a value of $600,000.
Required
Prepare the journal entries to record the above information for
2019 and 2020, assuming that:
a. The securities are categorized as trading...
Kitty Company began operations in the current year and acquired short-term debt investments in trading securities.
Kitty Company began operations in the current year and acquired short-term debt investments in trading securities. The year-end cost and fair values for its portfolio of these debt investments follow.
Portfolio of Trading Securities
Cost
Fair Value
Tesla Bonds
$
12,900
$
9,675
Nike Bonds
21,200
22,260
Ford Bonds
5,300
4,240
Prepare journal entry to record the...
Assume the company has investments in debt securities. One is classified as a trading security and...
Assume the company has investments in debt securities. One is
classified as a trading security and the other is classified as an
available-for-sale security. Create a scenario where it is year end
and the investments have changed in fair market value. Describe the
scenario and explain how the financial statements would be
affected. Be detailed and include numbers in the examples. Include
any applicable journal entries.
Johnson Inc. had the following transactions for January: 1. Purchased marketable securities in Smith Company for...
Johnson Inc. had the following transactions for January:
1. Purchased marketable securities in Smith Company for $100,000
cash.
2. Purchased 1,000 shares of Parker Co. for $55,000 as a long
term investment. Parker has 10,000 outstanding shares
issued and outstanding).
3. Purchased 10,000 shares of Drew Co. for $176,000 as a long
term investment. Drew had 40,000 shares issued and outstanding.
Johnson Inc. received the following dividends:
4. $1.50 per share from Parker Co.
5. $3.00 per share from Drew Co....
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