Refer to the data for Hartgraves Company in Mini Exercise 12-20. Assume that when the shares were
Question:
Refer to the data for Hartgraves Company in Mini Exercise 12-20. Assume that when the shares were purchased, management did not intend to sell the stock in the near future. Record the transactions and adjustments for Hartgraves Company as an available-for-sale security.
Data Mini Exercises 12-20:
Hartgraves Company had the following transactions and adjustments related to a bond investment that is a trading security.
2018
Oct.1 Purchased $500,000 face value of Skyline, Inc.'s 7% bonds at 97 plus a brokerage commission of $1,000. The bonds pay interest on September 30 and March 31 and mature in 20 years.
Hartgraves Company expects to sell the bonds in the near future.
Dec. 31 Made the adjusting entry to record interest earned on investment in the Skyline bonds.
31 Made the adjusting entry to record the current fair value of the Skyline bonds. At December 31, 2018, the fair value of the Skyline bonds was $490,000.
2019
Mar. 31Received the semiannual interest payment on investment in the Skyline bonds
Apr. 1 Sold the Skyline bond investment for $492,300 cash.
a. Prepare journal entries to record these transactions.
b. Post the journal entries from a to their respective T-accounts.
c. Record each of the transactions in the financial statement effects template.
Step by Step Answer:
Financial Accounting
ISBN: 9781618533111
6th Edition
Authors: Michelle L. Hanlon, Robert P. Magee, Glenn M. Pfeiffer, Thomas R. Dyckman