Prepare any journal entries you consider necessary

Assignment Help Other Subject

Reference no: EM132515442

The following information relates to the debt investments to Mayor Company on 2020.

Part 1. On January 1, Purchased 100, $1,000 Mirror Corp. 10% bonds for $100,000 (at 100). Interest is payable on July 1 and January 1.

Part 2. On April 1, Purchased 80, $1,000 Bondi Inc 9% bonds for $80,000 (at 100). Interest is payable on April 1 and October 1.

Part 3. On July 1, semiannual interest is received.

Part 4. On October 1, semiannual interest is received.

Part 5. On October 1, Sold 30 Bondi Inc. bonds for $34,000 after receiving the interest due.

Part 6. On December 31, accrued semiannual interest on Mirror Corp. and Bondi Inc bonds.

Part 7. On December 31, the fair value of Mirror Corp. and Bondi Inc bonds are 102 and 101, respectively (102 means fair value=102% of par value). Mayor Company doesn't have debt investment before 2020.

Instructions

(a) Prepare any journal entries you consider necessary, including year end entries (December 31), assuming these investments are managed to profit from changes in market interest rates (held for trading). Mayor Company doesn't have debt investment before 2020.

(b) Prepare a partial statement of financial position showing the Investment account at December 31, 2020.

(c) If Mayor Company purchase the debt investment to collect the contractual cash flow (held the debt investment to maturity), explain how the journal entries would differ from those in part (a).

Reference no: EM132515442

Questions Cloud

Discuss the concept of personality types : Discuss the concept of personality types as measured by the NEO PI-R as well as self-presentation on Facebook as measured by the SPFBQ.

Certain types of functioning as normal : Does the field of psychology have a mandate for conformity by distinguishing certain types of functioning as normal and other types as abnormal?

Implications for multicultural mental health treatment : What are implications for multicultural mental health treatment?

Discuss which parts of tania brain were damaged to account : Tania recently suffered a stroke. She has problems moving her right arm, and the right side of her face does not move when she smiles or makes other expressions

Prepare any journal entries you consider necessary : Prepare any journal entries you consider necessary, including year end entries (December 31), assuming these investments are managed to profit from changes

What are the risks of letting client data leave the office : Explain the purpose of a coordination of care form and when it might be used. What are the risks of letting client data leave the office?

Analysis and evaluation of security challenges : Analysis and evaluation ofsecurity challenges in cloud computing-Risks and threats affecting cloud adopting decision

Identify the sunk cost : Should Noble sell the acetone as is or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives

Strength that protects against mental illness : As a strength that protects against mental illness a) Post-traumatic growth is defined as the traumatic experiences that shatter or disrupt goals and purposes

User Account

All Pages