Question
#5 Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio.
#5
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The companys fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lears trading account occurred during December 2024 and the first week of 2025.
| December 17, 2024 | Purchased 130 Grocers Supply Corporation bonds at par for $585,000. |
|---|---|
| December 28, 2024 | Received interest of $3,200 from the Grocers Supply Corporation bonds. |
| December 31, 2024 | Recorded any necessary adjusting entry relating to the Grocers Supply Corporation bonds. The market price of the bond was $5,000 per bond. |
| January 5, 2025 | Sold the Grocers' Supply Corporation bonds for $617,500. |
Required:
- Prepare the appropriate journal entry or entries for each transaction.
- Indicate any amounts that Rantzow-Lear Company would report in its 2024 balance sheet and income statement as a result of this investment. Ignore income taxes.
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Lead Auditor ISO 22000 2018 Food Safety Management Systems FSMS Course
Authors: Marius Hauta
1st Edition
B0BTSCBJ82, 979-8376159750
