Question 14

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 Amalgamated's investment activities during the last quarter of 2021 and the first month of 2022. The only securities held by Amalgamated at October 1, 2021 were $45 million of 10% bonds of Kansas Abstractors, Inc, purchased on May 1, 2021 at face value and held in Amalgamated's trading securities portfolio. The company's fiscal year ends on December 31 2021 Oct. 18 Purchase 2 million shares of Millwork Ventures Company common stock for $59 million Millwork has a total of 36 million shares issued. 31 Received semiannual interest of $1.8 million from the Kansas Abstractors bonds. Nov. 1 Purchased les bonds of Holistic Entertainment Enterprises at their $18 millon face value, to be held until they mature in 2031. Semiannual Interest is payable April 30 and October 31 1 Sold the Kansas Abstractors bonds for $40 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 568 million face value, to be held until they mature in 2031. Semiannual interest is payable May 31 and November 38 ze Purchased U. S. Treasury bonds for $5.9 million as trading securities, hoping to earn profits on short-term differences in prices. 21 Purchased 4 million shares of NXS Corporation's 50 million shares of common stock for $50 million planning to hold these shanes until market conditions chcourage their sale, 23 Sold the Treasury bonds for $0.2 million 29 Received cash dividends of $7 million from the work Nedtures Company shares of common stock 51 Recorded any necessary adjusting entries relating to the investments Tise market price of the Hillwork Ventures Company common stock was $26.00 per share and $14.00 per shore for the NXS Corporation common stock. The fair values of the band investments were $58.7 million for Household Plastics Corpocation and $16.6llon for Holistic Entertainment Enterprises. 2022 Jon 7 Sols the Is Corporation common stock charts for 547 million Required: Presare the appropriate lournal entry for each transaction or event. Use av et on December 31 to adiust the portfolio of PINY 21 Purchased 4 million shares of NXS Corporation's 50 million shares of common stock for $50 million, planning to hold these shares until market conditions encourage their sale. 23 Sold the Treasury bonds for $6.2 million. 29 Received cash dividends of $7 million from the Millwork Ventures Company shares of common stock. 31 Recorded any necessary adjusting entries relating to the investments. The market price of the Millwork Ventures Company common stock was $26.00 per share and $14.00 per share for the Nxs Corporation common stock. The fair values of the bond investments were $58.7 million for Household Plastics Corporation and $16.6 million for Holistic Entertainment Enterprises. 2022 Jan. 7 Sold the NXS Corporation common stock shares for $47 million. Required: Prepare the appropriate journal entry for each transaction or event. Use one summary entry on December 31 to adjust the portfolio of equity investments to fair value. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (ie., 5,500,000 should be entered as 5.5).) View transaction ist View journal entry worksheet No Date Credit Debit 59.0 1 General Journal Investment in equity securities Cash Od 18 2021 590 3120171 Record the receipt of cash dividends of $7 million from the Millwork Ventures Company common shares. 12 Record the accrued interest for Holistic Entertainment bonds. 13 Record the accrued interest for Household Plastics bonds. 19 Record the entry to adjust the securities to fair value. 15 Record the entry to adjust to fair value the investment in NXS Corporation common shares on the date of sale. 16 Record the sale of the NXS Corporation common shares for $47 million Note : = journal entry has been entered Dec 01, 2021 Investment in bonds Cash 7 7 Dec 20, 2021 Investment in bonds Cash Dec 21.2021 Investment in equity securities 11 Dec 29, 2021 Cash Dividend revenue 7.0 7.0 12 Dec 31, 2021 Interest receivable 0.3 S Interest revenue 0.3 13 Dec 31, 2021 Interest receivable 0.6 Interest revenue >> 0.6 14 Dec 31, 2021 Loss on investment (unrealized, NI) Fair value adjustment >> 0.1% 0.1 x 15 Jan 07, 2022 90 Loss on investment (unrealized NI) Fair value adjustment 9.0 16 Jan 07 2022 470 Cash Fair value adjustment Investment in equity securities 3.0 50.0