Lannan Corp. had the following debt instrument transactions during the year ended December 31, 2014. The debt instruments were purchased to earn interest.
Feb. 1 Purchased six-month term deposit for $50,000.
Aug. 1 Term deposit matured and $51,250 cash was received.
1 Purchased a money-market fund for $55,000.
Dec. 1 Cashed in money-market fund and received $55,735 cash.
1 Purchased a 90-day (three-month) treasury bill for $99,260.
31 The treasury bill's value with accrued interest was $99,508.
Instructions
(a) Record the transactions.
(b) Show the financial statement presentation of the debt investments and any related accounts at December 31.
Taking It Further
What was the annual rate of interest on the term deposit that Lannan Corp. purchased on February 1, 2014?