Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Instructions Soto Industries Inc. is an athletic footware company that began operations on January 1, 2013. The following are bond (held-to-maturity) transactions by Soto Industries
Instructions Soto Industries Inc. is an athletic footware company that began operations on January 1, 2013. The following are bond (held-to-maturity) transactions by Soto Industries Inc., which has a fiscal year ending on December 31: Record these transactions on page 10 2013 Apr. June 1 Purchased $100,000 of Welch Co. 6%, 15-year bonds at their face amount plus accrued interest of $500. The bonds pay interest semiannually on March 1 and September 1. 1 Sept. 1 30 Purchased $210,000 of Bailey 4%, 10-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on May 1 and November 1. Received semiannual interest on the Welch Co. bonds. Sold $40,000 of Welch Co. bonds at 97 plus accrued interest of $200. Nov. 1 Received semiannual interest on the Bailey bonds. Dec. 31 Accrued interest on the Welch Co. bonds. 31 Accrued interest on the Bailey bonds. Record these transactions on page 11 2014 Mar. 1 Received semiannual interest on the Welch Co. bonds. May 1 Received semiannual interest on the Bailey bonds. Required: 1. Journalize the entries to record these transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Assume 360 days a year. Do not round your intermediate calculations and round final answers to the nearest dollar. 2. If the bond portfolio is classified as an available-for-sale investment, how would it be reported on the financial statements? ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable CHART OF ACCOUNTS Sote Industries Inc. General Ledger REVENUE 121 Allowance for DoubtfulAccounts 612 Dividend Revenue 631 Gain on Sale of 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 161 Investments-Weich Co. Bonds 641 Urealized Gainon EXPENSES 511 Cost of Mehandise Sold 512 Bad Debt Expens 142 Investments-Bailey Bonds 515 Credit Card Expense 515 Cash Short and Over 165 Valuation Allowance for Trading Investments 106 Valuation Allowance for Available-for 531 Advertising Expense 532 Delivery Expense 533 Repair Expense 181 Land 191 Store Equipment 192 Accumulated Depreciation-St Equipment 534 Selling Expenses 535 Rent Expe 193 Office Equipment 537 Office Supplies Expense 194 Accumulated Depreciation Office 538 S Supplies Expense Equipment 561 Depreciation Expense- LIABILITIES 210 Accounts Payable 221 Notes Payable 241 Salaries Payable 251 Sales Tax Payable EQUITY 311 Common Stock 312 Paid-in Capital in Excess of Par- Common Stock 321 Preferred Stock 322 Paid-in Capital in Excess of Par- Preferred Stock 331 Treasury Stock 332 Paid-in Capital from Bale of Treasury Stock 340 Retained Eamings 350 Unrealized Gain (Loss) on Available- for-Sale Investments 351 Cash Dividends 352 Stock Dividends 562 Depreciation Expense Office Equipment 500 Miscelanen Expense 731 Loss Sale of ATE DESCRIPTION JOURNAL POST. REF DEBIT Score: 207/24 ACCOUNTING FOLATION CREDIT ASSETS LIABILITIES EQUITY Apr. 1 Investment in Welch Interest Receivable Cash Jun. 1 Investment in baile Interest Receivable Cash 100,000.00 500.00 100,500.00 210,000.00 700.00 210,700.00 Sep.1 Cash 3,000.00 Interest Revenue 500.00 Interest Receivable 2,500.00 Sep. 30 Cash 39,000.00 Loss 1.200.00 Investment in Welch 200.00 Interest Revenue 40,000.00 Nov. 1 Cash 4,200.00 Interest Revenue 700.00 Interest Receivable 3,500.00 Adjusting Entries Dec. 31 Interest Receivable v 1,200.00 Interest Revenue Dec. 31 Interest Receivable Interest Revenue 1,200.00 1,400.00 1,400.00 1 DATE Mar. 1 Cash Interest Revenue Interest Receivable May 1 Cash Interest Revenue Interest Receivable DESCRIPTION JOURNAL ACCOUNTING F POST. REF DEBIT CREDIT ASSETS 3,000.00 1,200.00 1,800.00 4,200.00 1,400.00 2,800.00 LIABILITIES
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started