Question
Landers Inc. had the following transactions involving non-strategic investments during 2017. 2017 Apr. 1 Paid $100,000 to buy a 90-day term deposit, $100,000 principal amount,
Landers Inc. had the following transactions involving non-strategic investments during 2017.
2017 | |||
Apr. | 1 | Paid $100,000 to buy a 90-day term deposit, $100,000 principal amount, 5%, dated April 1. | |
12 | Purchased 3,000 common shares of Drifter Ltd. at $22.25. | ||
June | 9 | Purchased 1,800 common shares of Power Corp. at $49.50. | |
20 | Purchased 700 common shares of Westburne Ltd. at $15.75. | ||
July | 1 | Purchased for $67,412 a 7%, $65,000 Littleton Inc. bond that matures in eight years when the market interest rate was 6.4%. Interest is paid semiannually beginning December 31, 2017. Landers Inc. plans to hold this investment until maturity. | |
3 | Received a cheque for the principal and accrued interest on the term deposit that matured on June 30. | ||
15 | Received a $0.95 per share cash dividend on the Drifter common shares. | ||
28 | Sold 1,500 of the Drifter common shares at $26.00. | ||
Sept. | 1 | Received a $2.10 per share cash dividend on the Power Corp. common shares. | |
Dec. | 15 | Received a $1.35 per share cash dividend on the remaining Drifter Ltd. common shares owned. | |
31 | Received the interest on the Littleton bond. | ||
31 | The fair values of Landers Inc.s investments on this date were Drifter shares, $24.60; Power Corp. shares, $42.35; Westburne shares, $16.05. Assume the fair value and the carrying value of the Littleton bond were equal. | ||
2018 | |||
Feb. | 16 | Sold the remaining Drifter shares at $26.25. |
Required: 1. Prepare an amortization schedule for the Littleton bond showing only 2017 and 2018. (Round your intermediate and final answers to the nearest whole dollar amount. Enter all the amounts as positive values. Use 365 days in a year.) 2. Prepare journal entries to record the preceding transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to the nearest whole dollar amount. Use 365 days in a year.) 3. Show how Landers Inc.s investments will appear on its December 31, 2017, balance sheet.
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