16 May Questionacct 212 homework 2 chapter 15
Question
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.) |
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 | |||
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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.) |
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