Question
Monkey Mortgage Inc. engaged in the following non-strategic investment transactions during 2020: 2020 Jan. 1 Purchased for $427,057 a 7.0%, $420,000 Jaguar Corp. bond that
Monkey Mortgage Inc. engaged in the following non-strategic investment transactions during 2020:
2020 | ||||
Jan. | 1 | Purchased for $427,057 a 7.0%, $420,000 Jaguar Corp. bond that matures in five years when the market interest rate was 6.6%. Interest is paid semiannually beginning June 30, 2017. Monkey Mortgage Inc. plans to hold this investment until maturity. | ||
Mar. | 1 | Bought 8,000 shares of Mule Corp., paying $34.50 per share. | ||
May | 7 | Received dividends of $2.90 per share on the Mule Corp. shares. | ||
June | 1 | Paid $336,000 for 22,000 shares of Zebra common shares. | ||
June | 30 | Received interest on the Jaguar bond. | ||
Aug. | 1 | Sold the Mule Corp. shares for $34.75 per share. | ||
Dec. | 31 | Received interest on the Jaguar bond. | ||
Dec. | 31 | The fair value of the Zebra shares on this date was $15.00 per share. Assume the fair value of the bonds equalled the carrying value. | ||
2021 | ||||
Jan. | 14 | Sold the Zebra shares for $14.80. |
Required: 1. Prepare an amortization schedule for the Jaguar bond showing only 2020 and 2021. (Enter all the amounts as positive values. Do not round intermediate calculation. Round your final answers to the nearest whole dollar amount.)
2. Prepare the entries to record the transactions described above. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
3. Show how the investments would be reported on Monkeys December 31, 2020, balance sheet. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
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