Question
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The companys fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lears trading account occurred during December 2021 and the first week of 2022.
2021
Dec.17Purchased 105 Grocers Supply Corporation bonds at par for $367,500.
28 Received interest of $2,200 from the Grocers Supply Corporation bonds.
31Recorded any necessary adjusting entry relating to the Grocers Supply Corporation bonds. The market price of the bond was $4,000 per bond.
2022
Jan. 5Sold the Grocers' Supply Corporation bonds for $399,000.
Required: 1. Prepare the appropriate journal entry or entries for each transaction. 2. Indicate any amounts that Rantzow-Lear Company would report in its 2021 balance sheet and income statement as a result of this investment.
View transaction list View journal entry worksheet Indicate any amounts that Rantzow-Lear Company would report in its 2021 balance sheet and income statement as a result of this investmentStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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