Question

I HAVE ONLY MISSED 2 ANSWERS, THE LAST BOTTOM 2 ON LOWER RIGHT CORNER: EXPENSES & NET INCOME UNDER LOUDDER SELLS ALL BONDS.  

I HAVE ALL ANSWERS CORRECT EXCEPT THE TWO ABOVE MENTIONED: SO FAR I HAVE TYPED IN UNDER EXPENSES: -150,000, 150,000, 48,000, 0, AND -48,000 AND ALL ARE WRONG

ON NET INCOME I HAVE TYPED IN: 0, -150,000, -48,000, 48,000, AND 150,000

Marketable Debt Securities

Use the financial statement effects template to record the accounts and amounts for the following four transactions involving investments in marketable debt securities classified as available-for-sale securities. Assume that these transactions occur in 2016 (before the new rules for securities went into effect).

a. Loudder Inc. purchases 6,000 bonds with a face value of $1,000 per bond. The bonds are purchased at par for cash and pay interest at a semi-annual rate of 4%.
b. Loudder receives semi-annual cash interest of $240,000.
c. Year-end fair value of the bonds is $978 per bond.
d. Shortly after year-end, Loudder sells all 6,000 bonds for $970 per bond.

Use negative signs with answers, if appropriate.                         

				Balance Sheet								Income Statement
			Noncash				Contrib.		Earned
Transaction	Cash Asset	+	Assets	=	Liabilities	+	Captial	+	Capital		Revenues	-	Expenses	=	Net income
Loudder purchases bonds.	Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer
Loudder receives cash interest.	Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer
Bonds year-end fair value is determined.	Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer
Loudder sells all bonds	Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer

Answer 1

Balance Sheet

Income Statement

Noncash

Contrib.

Earned

Transaction

Cash Asset

+

Assets

=

Liabilities

+

Captial

+

Capital

Revenues

-

Expenses

=

Net income

Loudder purchases bonds

$                     -60,00,000

+

$         60,00,000

=

+

+

-

=

Loudder receives cash interest

$                        2,40,000

+

=

+

+

$          2,40,000

-

=

$             2,40,000

Bonds year-end fair value is determined.

+

$         -1,32,000

=

+

+

$      -1,32,000

-

=

Loudder sells all bonds

$                      58,20,000

+

$       -58,68,000

=

+

+

$        1,32,000

-

$           1,80,000

=

$            -1,80,000