Musli Inc. had the following transactions involving non-strategic investments during 2014: Required 1. Prepare an amortization schedule
Question:
Musli Inc. had the following transactions involving non-strategic investments during 2014:
Required
1. Prepare an amortization schedule for the Barker bond showing only 2014 and 2015.
2. Prepare journal entries to record the preceding transactions.
3. Show how Musli Inc.’s investments will appear on its December 31, 2014, balance sheet.
Analysis Component: Musli Inc. purchased the Barker Inc. bond for less than its face value. Explainwhy.
Transcribed Image Text:
2014 Feb 1 Paid S70,000 to buy a 60-day term deposit, 570,000 principal amount, 6.23%, dated Feb. 1 Purchased 6,000 common shares of Hilton Ltd. at $11.25 Received a cheque for the principal and accrued interest on the term deposit that matured today Purchased 8,200 common shares of Elder Corp. at $9.75 Purchased 14,000 common shares of Venture Ltd. at $3.40 Purchased for $67,069 a 6.8%, $68,000 Barker Inc. bond that matures in four years when the market interest rate was 7.2%. Interest is paid semi-annually beginning December 31, 2014. Musli Inc. plans to hold this investment until maturity Received a $0.30 per share cash dividend on the Hilton common shares Sold 4,000 of the Hilton common shares at $11.15 Received a $0.30 per share cash dividend on the remaining Hilton common shares owned 21 2 Apr. 15 20 1 July 15 28 Dec 1 31 Received the interest on the Barker bond 31 The fair values of Musli Inc.'s investments on this date were: Hilton shares $12.60; Elder shares, $10.30; Venture shares, $3.20. Assume the fair value and carrying value of the Barker bond were equal 2015 Feb. 16 Sold the remaining Hilton shares at $12.65 less a brokerage fee of $200
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 90% (10 reviews)
Part 1 Cash Interest Received Period Interest Revenue Discount Amort Unamortized Discount Carrying Value July 114 931 67069 Dec 3114 2312 2414 102 829 ...View the full answer
Answered By
Utsab mitra
I have the expertise to deliver these subjects to college and higher-level students. The services would involve only solving assignments, homework help, and others.
I have experience in delivering these subjects for the last 6 years on a freelancing basis in different companies around the globe. I am CMA certified and CGMA UK. I have professional experience of 18 years in the industry involved in the manufacturing company and IT implementation experience of over 12 years.
I have delivered this help to students effortlessly, which is essential to give the students a good grade in their studies.
3.50+
2+ Reviews
10+ Question Solved
Related Book For
Fundamental Accounting Principles Volume II
ISBN: 978-1259066511
14th Canadian Edition
Authors: Larson Kermit, Jensen Tilly
Question Posted:
Students also viewed these Accounting questions
-
During 2016, Chester had the following transactions involving capital assets: Gain on the sale of an arrowhead collection (acquired as an investment at different times but all pieces have been held...
-
Prepare an amortization schedule for a three-year loan of $69,000. The interest rate is 9 percent per year, and the loan calls for equal annual payments. How much interest is paid in the third year?...
-
During October, a firm had the following transactions involving revenue and expenses. a. Paid $1.250 for rent for October. b. Provided services for $2.850 in cash. c. Paid $270 for the October...
-
Write a paper about operations of Morning Star homes, a construction company. How you are progressing in your Project Management Plan. When is it appropriate to "crash" a project and what are the...
-
(a) Estimate the area under the graph of f(x) = cos x from x = 0 to x = /2 using four approximating rectangles and right endpoints. Sketch the graph and the rectangles. Is your estimate an...
-
Determine the projected component of the force FAB = 560 N acting along cable AC. Express the result as a Cartesianvector. 15 m 15 m Fan- 560 N 3 m.
-
Cascade Electronics Company has two divisions. Video and Audio, and two corporate service departments. Computer Support and Accounts Payable. The corporate expenses for the year ended December 31 are...
-
Refer to the time series data in Exercise 1. Using the average of all the historical data as a forecast for the next period, compute the following measures of forecast accuracy: a. Mean absolute...
-
Issued $80k, 6%, 120-day note payable. 23 days before year-end. How much interest over those 23 days
-
In Table 15.12 we provided estimates of the probability using the coupon in the Simmons Stores catalog promotion. A different value is obtained for each combination of values for the independent...
-
Hamilton Ltd. was organized on January 2, 2014. The following investment transactions and events subsequently occurred: Assume that Hamilton has a significant influence over Ginto with its 20% share....
-
Thornhill Corporation has excess cash resulting from extremely successful operations. It has decided to invest this cash in debt and equity securities as follows to be held as non-strategic...
-
Collins, Inc., a domestic corporation, operates a manufacturing branch in Singapore. During the current year, the manufacturing branch produces a loss of $300,000. Collins also earns interest income...
-
The following costs and inventory data were taken from the accounts of Sampson Company for 2019: January 1, 2019 December 31, 2019 Inventories: Raw materials $ 8,000 $ 7,000 Work in process 15,000...
-
The annual log returns on a portfolio is 15% and 10% separately over two years. Assume the initial investment on this portfolio is $10,000, what is the portfolio value at the end of the year two?
-
The bond market is the largest global financial market. Corporations, municipalities, and governments need to raise funds constantly, and debt is one of the easiest and cheapest ways to do it. Equity...
-
What exactly is Pascal trying to prove with his bet and what type of reasoning he is using? Present each possible outcome in Pascal's own sentence. How should an objection be made to the position...
-
You just purchased an interesting investment in teak forests for a total cost of $3,275. You expect to sell the entire investment in 17.93 years for $32,526. Given it's riskiness, the expected...
-
The demographic landscape has many implications for business. It also has implications for employees. From your perspective, what are the three most significant implications of the demographic...
-
Annual dividends of ATTA Corp grew from $0.96 in 2005 to $1.76 in 2017. What was the annual growth rate?
-
1 percent of Volcanos shares were tendered. Philips then completed the merger without a shareholder vote. Before the merger concluded, three plaintiffs filed lawsuits, which were combined into a...
-
Purpose: Bond or debt securities pay a stated rate of interest. This rate of interest is dependent on the risk associated with the investment. Fitch Ratings provides ratings for companies that issue...
-
On January 1, 2010, Gitzel Corporation issued $3,000,000 of 5-year, 8% bonds at 97. The bonds pay interest annually on January 1. By January 1, 2012, the market rate of interest for bonds of risk...
-
On January 1, 2010, Gitzel Corporation issued $3,000,000 of 5-year, 8% bonds at 97. The bonds pay interest annually on January 1. By January 1, 2012, the market rate of interest for bonds of risk...
-
Find the value today of a perpetuity that pays $20,000 per year for eight years, and then pays $3,000 per year forever, with the first payment one year from today.The annual effective interest rate...
-
s) Consider a bond being sold in the primary market with the following characteristics: currently priced at $1,000 which has 3 years to maturity, a 6% annual coupon rate, and a face value of $1,000...
-
On an installment note, in each succeeding payment: Question 6 options: a) The amounts allocated for interest expense and principal increases proportionately. b) The amount allocated to interest...
Study smarter with the SolutionInn App