Dollar-Mart Inc. is a general merchandise retail company that began operations on January 1, 2015. The following transactions relate to debt investments acquired by Dollar-Mart Inc., which has a fiscal year ending on December 31:
Dec. 31.
The held-for-trading investments were adjusted to fair value using the following fair values per share for the held-for-trading investments:
Aspire Inc. $31 Quick Tyme Inc. 16 Titan Inc. 37
2015
May 1. Purchased $60,000 of Brandon City 4%, 10-year bonds at par value plus accrued interest of $400. The bond is classified as an available-for-sale invest- ment. The bonds pay interest semiannually on March 1 and September 1.
Jun. 16. Purchased $112,000 of Morgan Co. 6%, 12-year bonds at par value plus accrued interest of $280. The bond is classified as an available-for-sale invest- ment. The bonds pay interest semiannually on June 1 and December 1.
Sep. 1. Received semiannual interest on the Brandon City bonds.
Oct. 1. Sold $24,000 of Brandon City bonds at 103 plus accrued interest of $80.
Dec. 1. Received semiannual interest on Morgan Co. bonds.
31. Accrued $480 interest on Brandon City bonds.
31. Accrued $560 interest on Morgan Co. bonds.
31. The available-for-sale bonds were adjusted to fair values of 102 and 101 for Brandon City and Morgan Co. bonds, respectively.
2016
Mar. 1. Received semiannual interest on the Brandon City bonds.
Jun. 1. Received semiannual interest on the Morgan Co. bonds. (Assume there are no purchases or sales of bonds during 2016. Also assume all subsequent interest transactions for 2016 have been recorded properly.)
Dec. 31. The available-for-sale bonds were adjusted to fair values of 99 and 100 for Brandon City and Morgan Co. bonds, respectively.
Instructions
1. Journalize the entries to record these transactions.
2. Prepare the investment-related current asset and shareholders' equity statement of financial position disclosures for Dollar-Mart Inc. on December 31, 2016, assuming the Retained Earnings` balance on December 31, 2016, is $310,000.