Every question must be answered ! Please don't do it for you only going to answer 1 out of them
Chapter 15 Investments S15-2 Accounting for held-to-maturity investments On January 1,2016, the Warden's Restaurant decides to invest in Lake Turner bonds. The bonds mature on December 31, 2030, and pay interest on June 30 and December 31 at 5% annually. The market rate of interest was 5% on January 1, 2016, so the $150,000 maturity value bonds sold for face value Warden's intends to hold the bonds until December 31,2030 Requirements l. Journalize the transactions related to Warden's investment in Lake Turner bonds during 2016 2. In what category would Warden's report the investment on the December 31, 2016, Balance Sheet E15-10 Accounting for bond investments Otter Creek & Co. owns vast amounts of corporate bonds. Suppose Otter Creek buys $1,200,000 of RoastCo bonds at face value on January 2, 2016. The RoastCo bonds pay interest at the annual rate of 3% on June 30 and December 31 and mature on December 31, 2020. Otter Creek intends to hold the investment until maturity. Requirements How would the bond investment be classified on Otter Creek's December 31, 2016, balance sheet? 2. Journalize the following on Otter Creek's books a. Receipt of final interest payment on December 31 2020 b. Disposal of the investment at maturity on December 31, 2020 5 Accounting for trading investments On February 1, 2016, Lee Co. decides to invest excess cash of $21,000 by purchasing 1,400 shares of Hart, Inc. stock at $15 per share. At year-end December 31, 2016, Hart's market price was $19 per share. The investment is categorized as a trading investment Requirements Journalize the transactions for Lee's investment in Hart, Inc. for 2016 2. In what category and at what value would Lee report the asset on the December 31, 2016, balance sheet? In what account would the market price change in Hart's stock be reported, if at all? What was the net effect of the investment on Lee's net income for the year ended December 31, 2016