Cardinal paz corp carries an account in its general ledger

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Reference no: EM13585529

Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions. Feb. 1, 2012 Sharapova Company common stock, $103 par, 206 shares $40,300 April 1 U.S. government bonds, 10%, due April 1, 2022, interest payable April 1 and October 1, 111 bonds of $1,000 par each 111,000 July 1 McGrath Company 12% bonds, par $51,200, dated March 1, 2012, purchased at 104 plus accrued interest, interest payable annually on March 1, due March 1, 2032 55,296

(a) Prepare entries necessary to classify the amounts into proper accounts, assuming that all the securities are classified as available-for-sale.

(b) Prepare the entry to record the accrued interest and the amortization of premium on December 31, 2012, using the straight-line method.

Sharapova Company common stock		$33,210
U.S. government bonds		149,970
McGrath Company bonds		59,150

What entry or entries, if any, would you recommend be made?

The U.S. government bonds were sold on July 1, 2013, for $120,120 plus accrued interest. Give the proper entry.

Reference no: EM13585529

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