Question
Live Large Inc. had the following transactions involving non-strategic investments during 2020. 2020 Apr. 1 Paid $114,000 to buy a 90-day term deposit, $114,000 principal
Live Large Inc. had the following transactions involving non-strategic investments during 2020.
2020 | |||
Apr. | 1 | Paid $114,000 to buy a 90-day term deposit, $114,000 principal amount, 7.0%, dated April 1. | |
12 | Purchased 4,400 common shares of Blue Balloon Ltd. at $23.50. | ||
June | 9 | Purchased 3,200 common shares of Purple Car Corp. at $51.50. | |
20 | Purchased 1,400 common shares of Yellow Tech Ltd. at $17.00. | ||
July | 1 | Purchased for $81,721 a 9.0%, $79,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 8.4%. Interest is paid semiannually beginning December 31, 2017. Live Large 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 Blue Balloon Ltd. common shares. | ||
28 | Sold 2,200 of the Blue Balloon Ltd. common shares at $27.25. | ||
Sept. | 1 | Received a $2.50 per share cash dividend on the Purple Car Corp. common shares. | |
Dec. | 15 | Received a $1.45 per share cash dividend on the remaining Blue Balloon Ltd. common shares owned. | |
31 | Received the interest on the Space Explore Inc. bond. | ||
31 | The fair values of Live Large Inc.s investments on this date were Blue Balloon shares, $26.00; Purple Car Corp. shares, $43.75; Yellow Tech shares, $19.55. Assume the fair value and the carrying value of the Space Explore bond were equal. | ||
2021 | |||
Feb. | 16 | Sold the remaining Blue Balloon shares at $27.50. |
Required: 1. Prepare an amortization schedule for the Space Explore bond showing only 2020 and 2021. (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. (Round your intermediate and final answers to the nearest whole dollar amount. Use 365 days in a year.)
3) Show how Live Large Inc.s investments will appear on its December 31, 2020, balance sheet. (Round your intermediate and final answers to the nearest whole dollar amount.)
Cash Interest Received Period Interest Income Premium Amort. Unamortized Premium Carrying Value July 1/20 Dec. 31/20 June 30/21 Dec. 31/21 View transaction list Journal entry worksheet Record the purchase of 7.0% term deposit as short-term investment. Note: Enter debits before credits. Date General Journal Debit Credit Apr 01, 2020 Record entry Clear entry View general journal View transaction list X 1 13 > Record the purchase of 7.0% term deposit as short-term investment. 2 Record the purchase of short-term investment. 3 Record the purchase of short-term investment. 4 Record the purchase of short-term investment. Credit 5 Record the purchase of a 9.0%, 8-year bond. 6 Record the collection of term deposit and interest earned. 7 Record the collection of dividend income. Note : = journal entry has been entered Record entry Clear entry View general journalStep by Step Solution
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