Question
On August 1, 2021, Grouper Corporation, a public company, purchased $105,600 of Alaska Ltd. five-year, 7% bonds at par. The bonds were purchased for trading
On August 1, 2021, Grouper Corporation, a public company, purchased $105,600 of Alaska Ltd. five-year, 7% bonds at par. The bonds were purchased for trading purposes and pay interest semi-annually on January 31 and July 31 of each year. On December 31, 2021, Groupers year end, the bonds fair value was $107,060. The bonds were sold on February 1, 2022, for $108,120.
Record the purchase of the bonds on August 1, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date | Account Titles and Explanation | Debit | Credit |
Aug. 1 | Investment Income or LossInterest RevenueInvestments at FVTPLNo EntryInvestment in AssociateCashInterest ReceivableInterest Expense | ||
Investments at FVTPLInvestment Income or LossInterest ReceivableInvestment in AssociateInterest RevenueNo EntryInterest ExpenseCash | |||
(To record purchase of investment.) |
Record any adjusting journal entries that are required at December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answer to 0 decimal places, e.g. 5,276.)
Date | Account Titles and Explanation | Debit | Credit |
Dec. 31 | Investment in AssociateInterest ReceivableNo EntryInterest RevenueInterest ExpenseInvestments at FVTPLInvestment Income or LossCash | ||
Interest ExpenseInvestments at FVTPLInvestment in AssociateNo EntryCashInterest RevenueInterest ReceivableInvestment Income or Loss | |||
(To accrue interest revenue.) | |||
Dec. 31 | Investments at FVTPLInterest ReceivableInterest RevenueInvestment Income or LossInvestment in AssociateInterest ExpenseCashNo Entry | ||
Interest RevenueInvestment Income or LossCashInvestments at FVTPLInterest ExpenseNo EntryInvestment in AssociateInterest Receivable | |||
(To record fair value adjustment.) |
Indicate how the investment is presented on Grouper Corporations December 31, 2021, balance sheet.
GROUPER CORPORATION Balance Sheet (Partial) For the Quarter Ended December 31, 2021December 31, 2021For the Month Ended December 31, 2021 | ||
Assets | ||
Property, Plant and EquipmentIntangible AssetsShort-Term InvestmentsLong-Term InvestmentsCurrent AssetsNon-Current Assets | ||
Investments at Fair Value through Other Comprehensive IncomeInvestments at Amortized Cost, Treasury BillInvestment in AssociateFair Value Through Profit or Loss InvestmentsInvestments at Amortized Cost | $ |
Record the receipt of the first interest payment on January 31, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answer to 0 decimal places, e.g. 5,276.)
Date | Account Titles and Explanation | Debit | Credit |
Jan. 31 | Investments at FVTPLInvestment Income or LossInterest ExpenseNo EntryInvestment in AssociateCashInterest RevenueInterest Receivable | ||
Investment in AssociateInterest ReceivableInterest ExpenseNo EntryInterest RevenueInvestment Income or LossInvestments at FVTPLCash | |||
Investment in AssociateInvestments at FVTPLNo EntryCashInvestment Income or LossInterest ExpenseInterest ReceivableInterest Revenue | |||
(Collection of interest receivable.) |
Record the sale of the bonds on February 1, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date | Account Titles and Explanation | Debit | Credit |
Feb. 1 | Investments at FVTPLInterest RevenueLoss on Sale of FVTPL InvestmentsCashNo EntryInvestment Income or LossInvestment in AssociateInterest ExpenseInterest Receivable | ||
Investments at FVTPLInterest RevenueInvestment Income or LossInvestment in AssociateInterest ReceivableCashInterest ExpenseLoss on Sale of FVTPL InvestmentsNo Entry | |||
CashNo EntryLoss on Sale of FVTPL InvestmentsInvestment Income or LossInvestments at FVTPLInvestment in AssociateInterest RevenueInterest ExpenseInterest Receivable | |||
(To record sale of bonds.) |
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