Problem 12-9 Securities held-to-maturity; securities available for sale, trading securities and equity investments [LO12-1, 12-2, 12-3, 12-4, 12-5]

Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamateds investment activities during the last quarter of 2018 and the first month of 2019. The only securities held by Amalgamated at October 1 were $55 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1 at face value and held in Amalgamateds trading portfolio. The companys fiscal year ends on December 31.

2018
Oct.		18		Purchased 2 million preferred shares of Millwork Ventures Company for $63 million.
		31		Received semiannual interest of $3.3 million from the Kansas Abstractors bonds.
Nov.		1		Purchased 10% bonds of Holistic Entertainment Enterprises at their $120 million face value, to be held until they mature in 2025. Semiannual interest is payable April 30 and October 31.
		1		Sold the Kansas Abstractors bonds for $49 million because rising interest rates are expected to cause their fair value to continue to fall. No unrealized gains and losses had been recorded on these bonds previously.
Dec.		1		Purchased 12% bonds of Household Plastics Corporation at their $40 million face value, to be held until they mature in 2028. Semiannual interest is payable May 31 and November 30.
		20		Purchased U. S. Treasury bonds for $7.5 million as trading securities, hoping to earn profits on short-term differences in prices.
		21		Purchased 4 million common shares of NXS Corporation for $54 million, planning to earn profits from dividends or gains if prevailing market conditions encourage sale.
		23		Sold the Treasury bonds for $8.1 million.
		29		Received cash dividends of $3 million from the Millwork Ventures Company preferred shares.
		31		Recorded any necessary adjusting entry(s) and closing entries relating to the investments. The market price of the Millwork Ventures Company preferred stock was $28.50 per share and $15.50 per share for the NXS Corporation common. The fair values of the bond investments were $58.6 million for Household Plastics Corporation and $18.6 million for Holistic Entertainment Enterprises.

2019
Jan.		7		Sold the NXS Corporation common shares for $52 million.

Oct 18, 2018	Investment in Millwork Ventures Company sharesselected answer correct	63.0selected answer correct	not attempted
		Cashselected answer correct	not attempted	63.0selected answer correct
2	Oct 31, 2018	Cashselected answer correct	3.3selected answer correct	not attempted
		Interest revenueselected answer correct	not attempted	3.3selected answer correct
3	Nov 01, 2018	Investment in Holistic Entertainment bondsselected answer correct	120.0selected answer correct	not attempted
		Cashselected answer correct	not attempted	120.0selected answer correct
4	Nov 01, 2018	Unrealized holding lossNIselected answer correct	not attempted	not attempted
		Fair value adjustmentselected answer correct	not attempted	not attempted
5	Nov 01, 2018	Cashselected answer correct	49.0selected answer correct	not attempted
		Fair value adjustmentselected answer correct	not attempted	not attempted
		Investment in Kansas Abstractors bondsselected answer correct	not attempted	not attempted
6	Dec 01, 2018	Investment in Household Plastics bondsselected answer correct	40.0selected answer correct	not attempted
		Cashselected answer correct	not attempted	40.0selected answer correct
7	Dec 20, 2018	Investment in U.S. treasury bondsselected answer correct	7.5selected answer correct	not attempted
		Cashselected answer correct	not attempted	7.5selected answer correct
8	Dec 21, 2018	Investment in NXS sharesselected answer correct	54.0selected answer correct	not attempted
		Cashselected answer correct	not attempted	54.0selected answer correct
9	Dec 23, 2018	Fair value adjustmentselected answer correct	not attempted	not attempted
		Unrealized holding gainNIselected answer correct	not attempted	not attempted
10	Dec 23, 2018	Cashselected answer correct	8.1selected answer correct	not attempted
		Fair value adjustmentselected answer correct	not attempted	not attempted
		Investment in U.S. treasury bondsselected answer correct	not attempted	not attempted
11	Dec 29, 2018	Cashselected answer correct	3.0selected answer correct	not attempted
		Dividend revenueselected answer correct	not attempted	3.0selected answer correct
12	Dec 31, 2018	Interest receivableHolistic Entertainmentselected answer correct	not attempted	not attempted
		Interest receivableHousehold Plasticsselected answer correct	not attempted	not attempted
		Interest revenueselected answer correct	not attempted	not attempted
13	Dec 31, 2018	Unrealized holding lossNIselected answer correct	not attempted	not attempted
		Fair value adjustmentselected answer correct	not attempted	not attempted
14	Dec 31, 2018	Fair value adjustmentselected answer correct	not attempted	not attempted
		Unrealized holding gainNIselected answer correct	not attempted	not attempted
15	Jan 07, 2019	Unrealized holding lossNIselected answer correct	not attempted	not attempted
		Fair value adjustmentselected answer correct	not attempted	not attempted
16	Jan 07, 2019	Cashselected answer correct	not attempted	not attempted
		Fair value adjustmentselected answer correct	not attempted	not attempted
		Investment in NXS shares