Question
ABC Company engaged in the following investment transactions during 2020 and 2021. 2020 Jan. 5 Purchased 15% of Quantas Corp. stock (15,000 shares) for $900,000.
ABC Company engaged in the following investment transactions during 2020 and 2021.
2020
Jan. 5 Purchased 15% of Quantas Corp. stock (15,000 shares) for $900,000.
April 1 Purchased 10% Bonds of Alpha Corporation bonds costing $600,000 at face value. These bonds are classified as available-for-sale.
May 30 Sold half of its investment in Quantas stock for $460,000.
Sep. 30 Received semiannual interest on Alpha Corporation Bonds.
Nov. 10 Received dividend of $2 per share on remaining Quantus shares.
Dec.31 Recorded any necessary adjusting entry(s) related to the above investments.
Fair value of Quantas shares were $56 per share and the fair value of the Alpha Corp. bonds were $610,000.
2021
Jan. 5 Sold the Alpha Corp. bonds for $585,000.
Required:
Prepare all journal entries related to the above investments for 2020 and 2021.
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Modern Auditing
Authors: Guadarshan S. Gill, Cosserat Graham, Leung Philomena, Coram Paul
5th Edition
0471340723, 978-0471340720
