Prepare general journal entries for the three bonds issued

Reference no: EM131887761

Question: Part A: On January 2, 2017, Kesha Company purchased 10,000 shares of the stock of Petty Corp. and did not obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $5 per share, and represents a 10% ownership stake. Petty Corp made $20,000 of net income in 2017, and paid dividends of $5,000 on December 15, 2017. On December 31. 2017, Petty Corp's stock was trading on the open market for $8 per share at the end of the year. Use this information to prepare the General Journal entry(ies) for January 2 purchase and the December 15 & 31, 2017 record of income & gain/toss. If no entry is required then write "No Entry Required.'

Part B: On January 1, 2017, Kesha Company purchased a significant influence shares investment in the Winehouse Company for $250,000. This investment balance represents 40% of the equity of the Winehouse Company. During 2017, Winehouse Company reported Net Inc to ome of $25,000 on November 15, 2017 Winehouse Company paid cash dividends of $10,000 its shareholders. Use this information to prepare the January 1, November 15 and December 31, 2017 General Journal entry (without explanation.) If no entry is required. thiin write "No Entry Required."

Halsey Company uses the straight-line method for amortization of all bond premium & discounts. During fiscal year 2017 Halsey had the following bond payable transactions:

January 2, issued ten, $1,000 bonds at 101. These 5-year bonds are dated January 1, 2017. The contract interest rate is 6%. Interest is payable semi-annual on January 1 and July 1.

July 1, Halsey issued $400,000 of 10%, 10-year bonds. The bonds are dated January 1, 2017 were issued at 90, and pay interest on July 1 and January 1.

October 1, Halsey issued 10-year bonds $10,000 face value bonds for $10,860 cash. The bonds have a stated rate of 8%. Interest is payable on October 1 and April 1.

Use this information to prepare General Journal entries for the three bonds issued and any interest accruals and payments for the fiscal year 2017. (Round all calculations to nearest whole dollar.)

Reference no: EM131887761

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