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some numbers are incorrect, please redo all. Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price. The company's
some numbers are incorrect, please redo all.
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price. The company's fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear's trading account occurred during December 2018 and the first week of 2019. 2018 Dec. 17 Purchased 165 Grocers' Supply Corporation bonds for $577,500 28 Received interest of $4,600 from the Grocers' Supply Corporation bonds. 31 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market price of the bonds were $4,000 per bond. 2019 Jan. 5 Sold the Grocers' Supply Corporation bonds for $643,500 Required: 1. Prepare the appropriate journal entry or entries for each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2 3 4 5 Purchased 165 Grocers' Supply Corporation bonds at par of $577,500 Note: Enter debits before credits. Date General Journal Debit Credit December 17, 2018 Investment in Grocers' Supply bonds 577,500 3 4 5 Received cash interest of $4,600 from the Grocers' Supply Corporation bonds es Note: Enter debits before credits. Date General Journal Debit Credit December 28, 2018 Cash 4,600 Interest revenue 4,600 2 4 5 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market price of the bonds were $4,000 per bond. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2018 Fair value adjustment 82,500 2 3 4 5 Record the entry to adjust the fair value. Note: Enter debits before credits. Date General Journal Debit Credit January 05, 2019 Unrealized holding loss-NI Fair value adjustment 2 3 4 5 Sold the Grocers' Supply Corporation bonds for $643,500 Note: Enter debits before credits. Date General Journal Debit Credit January 05, 2019 Cash 643,500 16,500 Fair value adjustment Investment in Grocers' Supply bonds 660,000 2. Indicate any amounts that Rantzow-Lear Company would report in its 2018 balance sheet and income statement as a result of this investment. Balance Sheet (short-term investment) Trading securities Income Statement: Interest revenue Unrealized holding gainStep by Step Solution
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