Question

Sandals Corporation was organized on January 1^st 2020. The following investments transactions and events occurred during the following months.

TASK:

Calculate and Journalized the following transaction.

2020

Jan 8               Sandals Corp intends to raise $800,000.00 for the purpose of expanding its operation internationally, as a result they issued a Bond for $800,000. The Bond was issued at 98.

Jan 18             Purchased 16,000 common shares of Halcyon at $1.40 plus $500 in transaction fees

Feb 27            Purchased 500 common shares of Zoom at $103.00, plus paid $100 transaction fees

Mar 6              The amount of money raised on January 8^th was not enough for its operation. Sandals is desirous of raising another $750,000. Bond Holders require the Bond to be issued at 101.

Apr 26            Purchase 1,000 common shares of Pacific Exploration at $18.00, plus an additional $250 in transaction fees.

Apr 30             Received $0.10 per share cash dividend on Halcyon common shares

June 4             Sold 10,000 Halcyon common shares at $1.15, less a transaction fee of $250.00

July 1              Paid $142,438, for a 7.2% four-year, $140,000 MarinaBay Inc. Bond that pays interest quarterly beginning September 30^th. The market rate of interest on this date was 6.7%. Sandals Corp plans to hold this investment until maturity.

July 17                        Received a $7.25 per share cash dividend on the Zoom shares.

Aug 1              Sandals issued a Bond with a par value of $450,000 dated 1^st June, and which pays 8% semi-annual interest, were sold on August 1^st at par value.

Sep 1             Received a $0.10 per share cash dividend on the remaining Halcyon shares

Sep 30             Received interest on the MarinaBay bond

Dec 31            Received interest on the MarinaBay bond

2021

Feb 6             Sold the remaining Halcyon shares at $1.35, less transaction fee of $150

Answer 1

	Books of Sandal Corporation
	Journal entries
Date	Account Title	Debit	Credit
8-Jan	Cash(800000/100*98)	784000
	Discount on Bonds payable(Bal.fig.)	16000
	Bonds payable		800000
18-Jan	Investment in Halcyon common shares((16000*1.40)+500)	22900
	Cash		22900
27-Feb	Investment in Zoom common shares((500*103)+100)	51600
	Cash		51600
6-Mar	NO Journal entry required
26-Apr	Investment in Pacific Exploration common shares((1000*18)+250)	18250
	Cash		18250
30-Apr	Cash(16000*0.10)	1600
	Dividend income		1600
4-Jun	Cash((10000*1.15)-250)	11250
	Loss on sale(Bal.fig.)	3062.5
	Investment in Halcyon common shares(22900/16000*10000)		14312.5
1-Jul	Investment in MarinaBay Inc. Bonds(HTM)	140000
	Premium on bond investment(Bal.fig.)	2438
	Cash		142438
17-Jul	Cash(500*7.25)	3625
	Dividend income		3625
1-Aug	Cash	450000
	Bonds payable		450000
1-Sep	Cash(6000*0.10)	600
	Dividend income		600
30-Sep	Cash(140000*7.2%/4)	2520
	Interest Income(142438*6.7%/4)		2385.84
	Premium on bond investment amortised(Bal.fig.)		134.16
31-Dec	Cash(140000*7.2%/4)	2520
	Interest Income((142438-134.16)*6.7%/4)		2383.59
	Premium on bond investment amortised(Bal.fig.)		136.41
6-Feb	Cash((6000*1.35)-150)	7950
	Loss on sale(Bal.fig.)	637.5
	Investment in Halcyon common shares(22900/16000*6000)		8587.5