Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Safety Development Corporation had relatively large lelle cash balances and invested them as follows in securities to be held as nonstrategle investments: 2020 Feb. 7

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Safety Development Corporation had relatively large lelle cash balances and invested them as follows in securities to be held as nonstrategle investments: 2020 Feb. 7 Purchased 3,500 comnon shares of Moyal Bank at $27.80, plus 1500 in transaction fees. 10 Purchased 2,500 ceman shares of Inperial oil at $55.00, and paid $250 in transaction fees. beifinnind June 30. The market rate of Interest on this date was 7. 4e8. Sellers corporation plans to hold this investant? for the duration of thi bond's contract life. May 26 Purchased 3,300 coanon shares of BCt at $14.64, plus $200 in transaction fees. June 1 flecefved a $0.25 per share cash divideed on the Royal Bank coemon shares. 17 Sold 2, son floyal Bank comen shares at $28, W. 10 Received interest on the Minco inc, bond. Aug. 5 Feceived a $0,30 per share cash dividend on the Inperial oil cemmon shares. Sept. 1 Received a $0.275 per share cash dividend on the renaining floyal Bank coninon shares. 30 Received interest on the Minco Inc, bond. Dec. 31 Received interest on the Minco Inc. bond. On December 31,2020 , the fair values of the investments heid by Safety Development Corporation were: Royal Bank, $28.80; Imperial Oil, \$53,38; and BCE, \$14.80. Assume the fair value and cairying value of the Minco inc. bond were equal. Required: 1. Prepare an amortization schedule for the Minco inc. bond showing only 2020 , (Round your intermediate and final answers to the nearest whole dollar omount. Enter all the amounts as positive values.) Required: 1. Prepare an amortization schedule for the Minco Inc. bond showing only 2020 . (Round your nearest whole dollar amount. Enter all the amounts as positive values.) 2. Prepare joumal entries to record the investment activity including the appropriate fair value adjustment on December 31 , (Roune your intermediate and final answers to the nearest whole dollar amount.) Journal entry workshent Note: Enter debits before credits. 3. Show how the investments will be reported on the December 31,2020 , balance sheet. (Round your intermediar to the nearest whole dollar amount.) Analysis Component: If the fair value adjustment is not recorded by Safety Development Corporation, what is the impact on the financial staf

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions