Question
FF&T Corporation is a confectionery wholesaler that frequently buys and sells securities to meet various investment objectives. The following selected transactions relate to FF&Ts investment
FF&T Corporation is a confectionery wholesaler that frequently buys and sells securities to meet various investment objectives. The following selected transactions relate to FF&Ts investment activities during the last two months of 2016. At November 1, FF&T held $42 million of 25-year, 10% bonds of Convenience, Inc., purchased May 1, 2016, at face value. Management has the positive intent and ability to hold the bonds until maturity. FF&Ts fiscal year ends on December 31. |
Nov. 1 | Received semiannual interest of $2.1 million from the Convenience, Inc., bonds. | |
Dec. 1 | Purchased 12% bonds of Facsimile Enterprises at their $40 million face value, to be held until they mature in 2026. Semiannual interest is payable May 31 and November 30. | |
31 | Purchased U.S. Treasury bills that mature in two months for $9.2 million. | |
31 | Recorded any necessary adjusting entry(s) relating to the investments. |
The fair values of the investments at December 31 were: |
Convenience bonds$38.7 million
Facsimile Enterprises bonds 40.9 million
U.S. Treasury bills 9.2 million
Required: | |
Prepare the appropriate journal entry for each transaction or event. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) |
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