Prepare Hertog Company's journal entries to record the following transactions for the current year. May7Purchases Kraft bonds
Question:
- Prepare Hertog Company's journal entries to record the following transactions for the current year.
May7Purchases Kraft bonds as a short-term investment in trading securities at a cost of $10,440.
June6Sells its entire investment in Kraft bonds for $11,150 cash.
3.Prepare Garzon Company's journal entries to record the following transactions for the current year.
Jan.1Purchases 9% bonds (as a held-to-maturity investment) issued by PBS at a cost of $52,000, which is the par value.
July1Receives first semiannual payment of interest from PBS bonds.
Dec.31Receives a check from PBS in payment of principal ($52,000) and the second semiannual payment of interest.
4.Journ Co. purchased short-term investments in available-for-sale debt securities at a cost of $51,800 cash on November 25. At December 31, these securities had a fair value of $50,600. This is the first and only time the company has purchased such securities.
1. 2. & 3.Prepare the November 25 entry to record the purchase of debt securities, the December 31 year-end adjusting entry for the securities' portfolio, and the April 6 entry when Journ sells 8% of these securities ($4,144 cost) for $5,500 cash.
5.During the current year, Reed Consulting acquired long-term available-for-sale debt securities on July 1 at a $79,000 cost. At its December 31 year-end, these securities had a fair value of $66,100. This is the first and only time the company purchased such securities.
Required:
1.Prepare the July 1 entry to record the purchase of these debt securities.
2.Prepare the year-end adjusting entry related to these securities.
7.Prepare Riley Company's journal entries to record the following transactions for the current year.
April18Purchases 450 common shares of XLT Co. as a short-term investment at a cost of $57 per share. With this stock investment, Riley has an insignificant influence over XLT.
May30Receives $1.40 per share from XLT in dividends.