Question
Soto Industries Inc. is an athletic footware company that began operations on January 1, 20Y3. The following are bond (held-to-maturity) transactions by Soto Industries Inc.,
Soto Industries Inc. is an athletic footware company that began operations on January 1, 20Y3. The following 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 | Purchased $79,800 of Welch Co. 6%, 15-year bonds at their face amount plus accrued interest of $798. The bonds pay interest semiannually on March 1 and September 1. |
June | 1 | Purchased $57,600 of Bailey 8%, 10-year bonds at their face amount plus accrued interest of $192. The bonds pay interest semiannually on May 1 and November 1. |
Sept. | 1 | Received semiannual interest on the Welch Co. bonds. |
30 | Sold $26,400 of Welch Co. bonds at 97 plus accrued interest of $132. | |
Nov. | 1 | Received semiannual interest on the Bailey bonds. |
Dec. | 31 | Accrued interest on the Welch Co. bonds. |
31 | Accrued interest on the Bailey bonds. |
Record these transactions on page 11
20Y4 | ||
---|---|---|
Mar. | 1 | Received semiannual interest on the Welch Co. bonds. |
May | 1 | Received semiannual interest on the Bailey bonds. |
Required:
1. | Journalize 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 journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Assume 360 days a year. Do not round your intermediate calculations and round final answers to the nearest dollar. |
2. | If the bond portfolio is classified as an available-for-sale investment, how would it be reported on the financial statements? |
Soto Industries Inc. is an athletic footware company that began operations on January 1, 20Y3. The following 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 | Purchased $79,800 of Welch Co. 6%, 15-year bonds at their face amount plus accrued interest of $798. The bonds pay interest semiannually on March 1 and September 1. |
June | 1 | Purchased $57,600 of Bailey 8%, 10-year bonds at their face amount plus accrued interest of $192. The bonds pay interest semiannually on May 1 and November 1. |
Sept. | 1 | Received semiannual interest on the Welch Co. bonds. |
30 | Sold $26,400 of Welch Co. bonds at 97 plus accrued interest of $132. | |
Nov. | 1 | Received semiannual interest on the Bailey bonds. |
Dec. | 31 | Accrued interest on the Welch Co. bonds. |
31 | Accrued interest on the Bailey bonds. |
Record these transactions on page 11
20Y4 | ||
---|---|---|
Mar. | 1 | Received semiannual interest on the Welch Co. bonds. |
May | 1 | Received semiannual interest on the Bailey bonds. |
Required:
1. | Journalize 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 journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Assume 360 days a year. Do not round your intermediate calculations and round final answers to the nearest dollar. |
2. | If the bond portfolio is classified as an available-for-sale investment, how would it be reported on the financial statements? |
X
Chart of Accounts
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Soto Industries Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
1a. Journalize the entries to record 20Y3 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 journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Assume 360 days a year. Do not round your intermediate calculations and round final answers to the nearest dollar
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
---|---|---|---|---|---|---|---|---|
1 | ||||||||
2 | ||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
8 | ||||||||
9 | ||||||||
10 | ||||||||
11 | ||||||||
12 | ||||||||
13 | ||||||||
14 | ||||||||
15 | ||||||||
16 | ||||||||
17 | Adjusting Entries | |||||||
18 | ||||||||
19 | ||||||||
20 | ||||||||
21 |
1b. Journalize the entries to record 20Y4 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 journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Assume 360 days a year. Do not round your intermediate calculations and round final answers to the nearest dollar.
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
---|---|---|---|---|---|---|---|---|
1 | ||||||||
2 | ||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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