Gerges Inc. engaged in the following non-strategic investment transactions during 2014: Required 1. Prepare an amortization schedule
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Required
1. Prepare an amortization schedule for the Jarvis bond showing only 2014 and 2015.
2. Prepare the entries to record the transactions described above.
3. Show how the investments would be reported on Gerges December 31, 2014, balancesheet.
Transcribed Image Text:
2014 1 Purchased for $406,894 a 696, $400,000 Jarvis Corp. bond that matures in five years when the market interest rate was 5.6%. Interest is paid semi- annually beginning June 30, 2014. Gerges Inc. plans to hold this investment until maturity. Jan. Mar May June Bought 6,000 shares of Medley Corp., paying $32.50 per share. 7 Received dividends of $0.90 per share on the Medley Corp. shares. 1 Paid $316,000 for 21,000 shares of Xtrapa common shares. 30 Received interest on the Jarvis bond Sold the Medley Corp. shares for $32.75 per share. Received interest on the Jarvis bond. The fair value of the Xtrapa shares on this date was $14.80 per share. Assume the fair value of the bonds equalled the carrying value. Aug. Dec. 1 31 31 2015 14 Jan. Sold the Xtrapa shares for $14.60.
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Related Book For
Fundamental Accounting Principles Volume II
ISBN: 978-1259066511
14th Canadian Edition
Authors: Larson Kermit, Jensen Tilly
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