Question

In: Accounting

Colah Company purchased $1,400,000 of Jackson, Inc., 7% bonds at par on July 1, 2021, with...

Colah Company purchased $1,400,000 of Jackson, Inc., 7% bonds at par on July 1, 2021, with interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale investment. At December 31, 2021, the Jackson bonds had a fair value of $1,640,000. Colah sold the Jackson bonds on July 1, 2022 for $1,260,000.


Required:
1. Prepare Colah’s journal entries for the following transactions:

  1. The purchase of the Jackson bonds on July 1.
  2. Interest revenue for the last half of 2021.
  3. Any year-end 2021 adjusting entries.
  4. Interest revenue for the first half of 2022.
  5. Any entries necessary upon sale of the Jackson bonds on July 1, 2022, including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale.

2. Complete the following table to show the effect of the Jackson bonds on Colah’s net income, other comprehensive income, and comprehensive income for 2021, 2022, and cumulatively over 2021 and 2022.

Solutions

Expert Solution

Any doubt comment below i will explain or resolve until you got....
PLEASE.....UPVOTE....ITS REALLY HELPS ME....THANK YOU....SOOO MUCH....
Please comment if any querry i will resolve as soon as possible


Related Solutions

Colah Company purchased $1,500,000 of Jackson, Inc., 8% bonds at par on July 1, 2021, with...
Colah Company purchased $1,500,000 of Jackson, Inc., 8% bonds at par on July 1, 2021, with interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale investment. At December 31, 2021, the Jackson bonds had a fair value of $1,750,000. Colah sold the Jackson bonds on July 1, 2022 for $1,350,000. Required: 1. Prepare Colah’s journal entries for the following transactions: The purchase of the Jackson bonds on July 1. Interest revenue for the last...
Colah Company purchased $1.9 million of Jackson, Inc., 7% bonds at par on July 1, 2018,...
Colah Company purchased $1.9 million of Jackson, Inc., 7% bonds at par on July 1, 2018, with interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale investment. At December 31, 2018, the Jackson bonds had a fair value of $2.19 million. Colah sold the Jackson bonds on July 1, 2019 for $1,710,000. The purchase of the Jackson bonds on July 1. Interest revenue for the last half of 2018. Any year-end 2018 adjusting entries....
Colah Company purchased $1 million of Jackson, Inc., 5% bonds at par on July 1, 2018,...
Colah Company purchased $1 million of Jackson, Inc., 5% bonds at par on July 1, 2018, with interest paid semiannually. Colah determined that it should account for the bonds as an available-for-sale investment. At December 31, 2018, the Jackson bonds had a fair value of $1.2 million. Colah sold the Jackson bonds on July 1, 2019 for $900,000. Required: 1. Prepare Colah’s journal entries to record: a. The purchase of the Jackson bonds on July 1 b. Interest revenue for...
Colah Company purchased $1.8 million of Jackson, Inc., 8% bonds at par on July 1, 2018,...
Colah Company purchased $1.8 million of Jackson, Inc., 8% bonds at par on July 1, 2018, with interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale investment. At December 31, 2018, the Jackson bonds had a fair value of $2.08 million. Colah sold the Jackson bonds on July 1, 2019 for $1,620,000. The purchase of the Jackson bonds on July 1. Interest revenue for the last half of 2018. Any year-end 2018 adjusting entries....
Colah Company purchased $1.7 million of Jackson, Inc., 5% bonds at par on July 1, 2018,...
Colah Company purchased $1.7 million of Jackson, Inc., 5% bonds at par on July 1, 2018, with interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale investment. At December 31, 2018, the Jackson bonds had a fair value of $1.97 million. Colah sold the Jackson bonds on July 1, 2019 for $1,530,000. The purchase of the Jackson bonds on July 1. Interest revenue for the last half of 2018. Any year-end 2018 adjusting entries....
Colah Company purchased $1.5 million of Jackson, Inc. 8% bonds at par on July 1, 2018,...
Colah Company purchased $1.5 million of Jackson, Inc. 8% bonds at par on July 1, 2018, with interest paid semi-annually. When the bonds were acquired Colah decided to elect the fair value option for accounting for its investment. At December 31, 2018, the Jackson bonds had a fair value of $1.75 million. Colah sold the Jackson bonds on July 1, 2019 for $1,350,000. Required: 1. Prepare Colah's journal entries for the following transactions: a. The purchase of the Jackson bonds...
Exercise 12-12 (Algo) Available-for-sale securities [LO12-1, 12-4] Colah Company purchased $1,700,000 of Jackson, Inc., 5% bonds...
Exercise 12-12 (Algo) Available-for-sale securities [LO12-1, 12-4] Colah Company purchased $1,700,000 of Jackson, Inc., 5% bonds at par on July 1, 2021, with interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale investment. At December 31, 2021, the Jackson bonds had a fair value of $1,970,000. Colah sold the Jackson bonds on July 1, 2022 for $1,530,000. Required: 1. Prepare Colah’s journal entries for the following transactions: The purchase of the Jackson bonds on...
On July 1, 2013 an investment manager purchased five-hundred $1,000 par value bonds with an 8.75%...
On July 1, 2013 an investment manager purchased five-hundred $1,000 par value bonds with an 8.75% coupon rate for $467,000. The bonds mature on July 15, 2021. a. According to this information, would you expect that the rates being offered by similar investments on the open market carry a rate that is higher, or lower, than the coupon rate? Explain. b. Find the current yield AND the yield to maturity. Show your work.
On July 1, 2013 an investment manager purchased five-hundred $1,000 par value bonds with an 8.75%...
On July 1, 2013 an investment manager purchased five-hundred $1,000 par value bonds with an 8.75% coupon rate for $467,000. The bonds mature on July 15, 2021. a. According to this information, would you expect that the rates being offered by similar investments on the open market carry a rate that is higher, or lower, than the coupon rate? Explain. b. Find the current yield AND the yield to maturity. Show your work.
On January 1, 2021, Wildcat Company purchased $93,000 of 10% bonds at discount.
On January 1, 2021, Wildcat Company purchased $93,000 of 10% bonds at discount. The market interest rate is 12%. The bonds are to be held-to-maturity, and will last for 3 years. The bonds pay interest semiannually on January 1 and July 1.Required: (1.) Prepare the appropriate journal entry to record the acquisition of the bonds. (2.) Record the first two interest payments.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT