Question acct 212 homework 2 chapter 15

29 Jun Question acct 212 homework 2 chapter 15

Question
acct 212 homework 2 chapter 15

award:
2 out of
2.00 points

Exercise 15-1 Accounting for short-term held to-maturity securities L.O. P2

Prepare journal entries to record the following transactions involving the short-term securities investments of Maxwell Co., all of which occurred during year 2011.

a.

On February 15, paid $128,000 cash to purchase FTR’s 90-day short-term debt securities ($128,000 principal), dated February 15, that pay 9% interest (categorized as held-to-maturity securities). (Omit the “$” sign in your response.)

b.

On May 16, received a check from FTR in payment of the principal and 90 days’ interest on the debt securities purchased in transaction a. (Do not round your intermediate calculations. Use 360 days a year. Omit the “$” sign in your response.)

Explanation:

2.

award:
1.72 out of
2.00 points

Exercise 15-2 Accounting for short-term trading securities L.O. P1

Prepare journal entries to record the following transactions involving the short-term securities investments of Smart Co., all of which occurred during year 2011.

a.

On March 22, purchased 820 shares of FIX Company stock at $24 per share plus a $340 brokerage fee. These shares are categorized as trading securities. (Omit the “$” sign in your response.)

b.

On September 1, received a $3 per share cash dividend on the FIX Company stock purchased in transaction a. (Omit the “$” sign in your response.)

c.

On October 8, sold 410 shares of FIX Co. stock for $34 per share, less a $330 brokerage fee. (Do not round your intermediate calculations. Omit the “$” sign in your response.)

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3.

award:
2 out of
2.00 points

Exercise 15-3 Accounting for short-term available-for-sale securities L.O. P3

Prepare journal entries to record the following transactions involving the short-term securities investments of Prairie Co., all of which occurred during year 2011.

a.

On August 1, paid $64,000 cash to purchase Better Buy’s 11% debt securities ($64,000 principal), dated July 30, 2011, and maturing January 30, 2012 (categorized as available-for-sale securities). (Omit the “$” sign in your response.)

b.

On October 30, received a check from Better Buy for 90 days’ interest on the debt securities purchased in transaction a. (Do not round your intermediate calculations. Use 360 days a year. Omit the “$” sign in your response.)

General Journal

Debit

Credit

Oct. 30

Cash

Interest revenue

.

award:
2 out of
2.00 points

Exercise 15-6 Accounting for trading securities L.O. P1

Forex Co. purchases various investments in trading securities at a cost of $51,000 on December 27, 2011. (This is its first and only purchase of such securities.) At December 31, 2011, these securities had a fair value of $69,000.

1.

Prepare the December 31, 2011, year-end adjusting entry for the trading securities’ portfolio. (Omit the “$” sign in your response.)

2.

Prepare the January 3, 2012, entry when Forex sells a portion of its trading securities (that had originally cost $25,500) for $30,000. (Omit the “$” sign in your response.)

5.

award:
1 out of
1.00 point

Exercise 15-7 Adjusting available-for-sale securities to fair value L.O. P3

On December 31, 2011, Rollo Company held the following short-term investments in its portfolio of available-for-sale securities. Rollo had no short-term investments in its prior accounting periods.

Cost

Fair Value

Vicks Corporation bonds payable

$

66,900

$

62,300

Pace Corporation notes payable

52,800

44,900

Lake Lugano Company common stock

86,600

83,800

Prepare the December 31, 2011, adjusting entry to report these investments at fair value. (Omit the “$” sign in your response.)

6.

award:
2.82 out of
3.00 points

Exercise 15-8 Transactions in short-term and long-term investments L.O. P1, P2, P3

a.

On February 15, paid $120,000 cash to purchase American General’s 120-day short-term notes at par, which are dated February 15 and pay 9% interest (classified as held-to-maturity).

b.

On March 22, bought 600 shares of Frain Industries common stock at $35 cash per share plus a $120 brokerage fee (classified as long-term available-for-sale securities).

c.

On June 15, received a check from American General in payment of the principal and 120 days’ interest on the notes purchased in transaction a.

d.

On July 30, paid $36,000 cash to purchase MP3 Electronics’ 8% notes at par, dated July 30, 2011, and maturing on January 30, 2012 (classified as trading securities).

e.

On September 1, received a $0.54 per share cash dividend on the Frain Industries common stock purchased in transaction b.

f.

On October 8, sold 300 shares of Frain Industries common stock for $41 cash per share, less a $100 brokerage fee.

g.

On October 30, received a check from MP3 Electronics for three months’ interest on the notes purchased in transaction d.

Prepare journal entries to record the above transactions involving both the short-term and long-term investments of Sophia Corp., all of which occurred during calendar year 2011. Use the account Short-Term Investments for any transactions that you determine are short term. (Use 360-days a year. Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the “$” sign in your response.)