Chapter 16, Problem 5P, Intermediate accounting2:

Debt investment, equity investment.

K&Z potato chip company, a US GAAP reporter provides you with the following information regarding its investments in equity securities during the current year.

Jan 1: K&Z is currently holding 8500 faithful corporation common shares in its available for sale portfolio. The faithful shares cost $20 per share. THere is a debit balance of $17000 in the fair value adustment account.

Jan 23: K&Z purchased 1700 shares of Lawrence Co common stock for 155 per share. They are holding these shares for trading purposes.

Feb 4: K&Z acquired 136000 of the 340000 outstanding shares of zombie, inc for a total cost of 1020000

March 23: Faithful Corp paid a 3.40 per share cash divident.

June 30: Zombie, Inc reported 1850000in net income for the year. Zombie also declared and paid a cash dividend of 2.55 per share.

Oct 15: KZ purchased 340 bonds of the pierre nardo group at 1000 par and intends to hold the investment to maturity .

Dec 31: Accrued interest on Pierre Nardo Group bonds amounted to 42500

Dec 31: The year end market values of the faithful corporation and lawrence shares are 30.60 and 170 per share, respectively. The Pierre Nardo Group bonds were trading at 1700 at the end of the current period and Zombie was trading at 10 per share.

Prepare all journal entries neccesary to record investment transactions. Show all computations.