Problem 17-3

Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions.

(a) Prepare entries necessary to classify the amounts into proper accounts, assuming that all the securities are classified as available-for-sale. (Credit account titles are automatically indented when 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.)

Acct. Titles and Explanation	Debit	Credit

(b) Prepare the entry to record the accrued interest and the amortization of premium on December 31, 2014, using the straight-line method. (Round answers to 0 decimal places, e.g. 2,500. Credit account titles are automatically indented when 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	Acct. Titles & Explanation	Debit	Credit
12/31/2014
(Blank)
(Blank)

(c) The fair values of the investments on December 31, 2014, were:

Sharapova Company Common Stock	$32,460
U.S. Government Bonds	145,530
McGrath Company Bonds	66,700

What entry, if any, would you recommend be made? (Round answers to 0 decimal places, e.g. 2,500. Credit account titles are automatically indented when 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	Acct. Titles & Explanation	Debit	Credit
12/31/2014
(Blank)

(d) The U.S. government bonds were sold on July 1, 2015, for $119,740 plus accrued interest. Give the proper entry. (Credit account titles are automatically indented when 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	Acct. Titles & Explanation	Debit	Credit
7/1/2015
(Blank)
(Blank)
Blank)