Soto Industries Inc. is an athletic footware company that began operations on January 1, 2013. The folowing are bond (held-to-maturity) transactions by Soto Industries Inc, which has a fiscal year ending on December 31 Record these transactions on page 10 20Y3 Apr 1 June 1 Purchased $100,000 of Welch Co. 6%, 15-year bonds at their face amount plus accrued interest of $500. The bonds pay interest semiannually on March 1 and September 1 Purchased $210,000 of Bailey 4%, 10-year bonds at their face amount plus accrued interest of 5700 The bonds pay interest semiannually on May 1 and November 1 Received semiannual interest on the Welch Co bonds Sold S40.000 of Welch Co bonds at 97 plus accrued interest of 5200 Received semiannual interest on the Balloy bonds Accrued interest on the Welch Co bonds Sept 1 30 Nov. 1 Dec 31 31 Accrued interest on the Bailey bonds Record these transactions on page 11 2014 Mar 1 Received semiannual interest on the Welch Co. bonds Received semiannual interest on the Bailey bonds May 1 Required: 1. Joumalize the entries to record these transactions. Refer to the chart of accounts for the exact wording of the account titles CNOW journals do not use lines for journal explanations. Every line on a joumal page is used for debitor credit entries CNOW journals will automatically indent a credit entry when a credit amount is entered Assume 360 days a year Do nor round your intermediare calculations and round final answers to the nearest dollar. 2 the bond portfolio is classified as an available for sale investment how would be reported on the financial Statements? CHART OF ACCOUNTS Soto Industries Inc. General Ledger ASSETS REVENUE 110 Cash 410 Sales 111 Petty Cash 611 Interest Revenue 120 Accounts Receivable 612 Dividend Revenue 121 Allowance for Doubtful Accounts 631 Gain on Sale of investments 131 Notes Receivable 641 Unrealized Gain on Trading Investments 132 Interest Receivable 141 Merchandise Inventory EXPENSES 511 Cost of Merchandise Sold 145 Office Supplies 146 Store Supplies 512 Bad Debt Expense 151 Prepaid Insurance 515 Credit Card Expense 516 Cash Short and Over 161 Investments Welch Co Bonds 520 Salaries Expense 162 Investments-Bailey Bonds 165 Valuation Allowance for Trading Investments 531 Advertising Expense 532 Delivery Expense 166 Valuation Allowance for Available for Sale Investments 181 Land 191 Store Equipment 192 Accumulated Depreciation Store Equipment 193 Office Equipment 194 Accumulated Depreciation Office Equipment 533 Repairs Expense 534 Selling Expenses 535 Rent Expense 536 Insurance Expense LIABILITIES 537 Office Supplies Expense 538 Store Supplies Expense 561 Depreciation Expense-Store Equipment 562 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 210 Accounts Payable 221 Notes Payable 231 Interest Payable 710 Interest Expense 241 Salaries Payable Loss on Sale of Investments 741 Unrealized Loss on Trading Investments 251 Sales Tax Payable EQUITY 311 Common Stock 312 Paid-in Capital in Excess of Par Common Stock 321 Preferred Stock 322 Pald-in Capital in Excess of Par-Preferred Stock 331 Treasury Stock 332 Paid in Capital from Sale of Treasury Stock 340 Retained Earnings 350 Unrealized Gain (Loss) on Available for Sale investments 351 Cash Dividends 352 Stock Dividends Journal 1a. Journalize the entries to record 2093 transactions Refer to the chart of accounts for the exact wording of the account title CNOW journals do not use dnes for our explanations Every line on a journal page is used for debitor credit entres. CNOW journals will automatically indent a credt entry when a credit amount esenteved Assu 360 days a year. Do not round your intermediate calculations and round final answers to the nearest dollar NGE 10 JOURNAI ACCOUNTING EQUATION DATE DESCRIPTION POST REF DERIT 1 CREDIT LILITIES EQUITY 3 I 10 11 12 11 14 16 17 Adjusting Entries 11 19 20 21 b. Journalce the entries fo record 2014 transactions Refer to the chart of accounts for the exact wording of the account CNOW journal do not use for our explanations. Every fine on a journal page is used for debitor credit entries. CNOW Journals will automatically indent a credit entry when a credit amount is ved sau 360 days a year. Do not round your intermediate calculations and round final answers to the nearest dolar PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST RY DEBET CREDIT ASSETS LATIES 1 2 Final Question 2. If the bond portfolio is classified as avalable for sale, what impact would this have on financial statement disclosure? if the bonds are classified as available-for-sale securities, then the portfolio of bonds would need to be This would be accomplished by using a valuation allowance account and an unrealized gain floss) account as part of If the fair value were than the cost of the bond portfolio, the two accounts would be added to investments and stockholders' equity, respectively at the fair value were than the cost of the bond portfolio, the two accounts would be subtracted from investments and stockholders' equity, respectively