Cardinal Paz Corp. carries an account in its general ledger called Investments, which contains debits for investment purchases, and no credits, with the following descriptions.

Instructions

Round all computations to the nearest dollar.

a. Prepare entries necessary to classify the amounts into proper accounts, assuming that Paz plans to actively manage these investments.

b. Prepare the entry to record the accrued interest on December 31, 2022.

c. The fair values of the investments on December 31, 2022, were:

Sharapova Company shares ..................... $ 31,800
Government bonds ..................................... 124,700
McGrath Company bonds ............................ 58,600

What entry or entries, if any, would you recommend be made?

d. The government bonds were sold on July 1, 2023, for $119,200 plus accrued interest. Give the proper entry.

Transcribed Image Text:

Feb. Sharapova Company ordinary shares, $10o par, 200 shares $ 37,400 1, 2022 April Government bonds, 11%, due April 1, 2028, interest payable April 1 and October 1, 110 bonds of $1,000 par each 1 110,000 July McGrath Company 12% bonds, par $50,000, dated March 1, 2022 purchased at 104, plus accrued interest payable annually on March 1, due March 1, 2042 54,000 1