Chapter 13 eBook Instructions Chart of Accounts General Journal Income Statement Balance Sheet Analysis = Instructions x Holly Company invests its excess cash in marketable securities. At the beginning of 2019, it had the following portfolio of investments in available-for-sale debt securities: Security Par Value Amortized Cost Igor Company 5% bonds, maturing on Dec. 31, 2028 $10,000 $8,400 12/31/18 Fair Value $9,400 21,700 Ozone Company 6% bonds, maturing on Dec. 31, 2023 $20,000 23.100 Totals S31,500 S31,100 During 2019, the following transactions occurred: Mar. 31 Mar. 31 Purchased Union Company 8% bonds with a face value of $10,000 for $10.000 plus accrued interest; interest is payable on the bonds each June 30 and December 31. . Sold the Ozone Company investment for $22,000 plus accrued interest Received the semiannual interest on the Union Company bonds. Received the annual Interest on the Igor Company bonds and the semiannual interest on the Union Company bonds. June 30 Dec. 31 The December 31 closing market prices were as follows: Igor Company bonds, $9,000; and Union Company 8% bonds, S10,100. Holly uses the straight-line method to amortize any discounts or premiums. Required: During 2019, the following transactions occurred: Mar. 31 Purchased Union Company 8% bonds with a face value of $10,000 for $10,000 plus accrued interest; interest is payable on the bonds each June 30 and December 31. Mar. 31 Sold the Ozone Company investment for $22,000 plus accrued interest. June 30 Received the semiannual interest on the Union Company bonds. Dec. 31 Received the annual interest on the Igor Company bonds and the semiannual interest on the Union Company bonds. The December 31 closing market prices were as follows: Igor Company bonds, $9,000; and Union Company 8% bonds, $10,100. Holly uses the straight-line method to amortize any discounts or premiums. Required: 1. Prepare journal entries to record the preceding information. 2. Show what is reported on Holly's 2019 income statement. 3. Assuming the investment in Igor Company bonds is considered to be a current asset and the investment in Union Company bonds is considered to be a noncurrent asset, show how all the items are reported on Holly's December 31, 2019, balance sheet. 4. What is Holly's unrealized holding gain or loss on available-for-sale securities in 2019? Chart of Accounts 111 Cash 411 Sales Revenue 114 Investment in Available-for-Sale Securities 431 Interest Income 119 Allowance for Change in Fair Value of Investment 432 Dividend Income 121 Accounts Receivable 435 Gain on Sale of Available-for-Sale Securities 127 Interest Receivable EXPENSES 141 Inventory 152 Prepaid Insurance 500 Cost of Goods Sold 511 Insurance Expense 181 Equipment 189 Accumulated Depreciation 512 Utilities Expense 521 Salaries Expense LIABILITIES 532 Bad Debt Expense 211 Accounts Payable 540 Interest Expense 231 Salaries Payable 541 Depreciation Expense 250 Unearned Revenue 559 Miscellaneous Expenses 261 Income Taxes Payable 895 Loss on Sale of Available-for-Sale Securities 910 Income Tax Expense EQUITY 311 Common Stock 331 Retained Earnings 391 Unrealized Holding Gain/Loss: Available-for-Sale Securities