a. On February 15, paid $120,000 cash to purchase GMI's 90-day short-term notes at par, which are dated February 15 and pay 9% Interest (classified as held-to-maturity) b. On March 22, bought 900 shares of Fran Inc. common stock at $34 cash per share. Cancun's stock investment results in it having an insignificant influence over Fran. c. On May 15, received a check from GMI In payment of the principal and 90 days' Interest on the notes purchased in part a. d. On July 30, paid $36,000 cash to purchase MP Inc.'s 8%, six-month notes at par, dated July 30 (classified as trading securities). e. On September 1, received a $0.66 per share cash dividend on the Fran Inc. common stock purchased in part b. f. On October 8, sold 450 shares of Fran Inc. common stock for $40 cash per share. 9. On October 30, received a check from MP Inc. for three months' interest on the notes purchased in port d. Prepare journal entries to record the above transactions involving both the short-term and long-term investments of Cancun Corp., all of which occurred during the current year. (Use 360 days in a year. Do not round your intermediate calculations. Round your answers to the nearest whole dollar.) Answer is complete but not entirely correct. No Transaction General Journal Credit Debit 120,000 1 Debt investments - HTM Cash 120,000 2 b. 30,600 Debt investments - AFS Cash 30,600 3 c 122,700 Cash Debt investments - HTM 120,000 2,700 Interest revenue 4 35,000 Debt Investments - Trading Cash 36,000 5 594 Cash Dividend revenue 594 6 Cash 18,000 Debt investments - AFS Gain on sale of debt investments 15,300 2,700 7 g 720 Cash Interest revenue 720 a. On February 15. paid $120,000 cash to purchase GMI's 90-day short-term notes at par, which are dated February 15 and pay 9% Interest (classified as held-to-maturity). b. On March 22, bought 900 shares of Fran Inc. common stock at $34 cash per share. Cancun's stock investment results in it having an insignificant influence over Fran. c. On May 15, received a check from GMI in payment of the principal and 90 days' interest on the notes purchased in part a. d. On July 30, paid $36,000 cash to purchase MP Incs 8% six-month notes at par, dated July 30 (classified as trading securities). e. On September 1, received a $0.66 per share cash dividend on the Fran Inc. common stock purchased in part b. t. On October 8, sold 450 shares of Fran Inc. common stock for $40 cash per share. g. On October 30, received a check from MP Inc. for three months' interest on the notes purchased in part d. Prepare journal entries to record the above transactions involving both the short-term and long-term investments of Cancun Corp., all of which occurred during the current year. (Use 360 days in a year. Do not round your intermediate calculations. Round your answers to the nearest whole dollar.) & Answer is complete but not entirely correct. Debit Credit No Transaction General Journal Debt investments - HTM Cash 1 120,000 120,000 30,600 2 b. Fair value adjustment - AFS Cash 30,600 122,700 3 Cash Debt Investments - HTM 120,000 2,700 Interest revenue 36,000 4 Debt Investments - Trading Cash 36.000 594 Cash 594 Dividend revenue 18,000 6 Cash Fair value adjustment - AFS Gain on sale of stock investments 15,300 2,700 720 9 Cash 720 Interest revenue
