Reference no: EM132797247
Question -
Part 1 - On January 1,2020 Barone Company purchased as a hold for collection and selling, 100 bonds face value $100 each, 8% bond for $10,000. The bond pays interest each January 1. The half of bond were sold on April 1, 2020 for $4,950 plus accrued interest. Interest has not been accrued since the last interest payment date. On Dec 31, fair value of bond is 99.
Instructions -
a. Prepare journal entries on January 1, April 1 and Dec 31, 2020?
b. If Baron classify the investment as hold for collection, and didn't sale the investment on 1 April, prepare journal entries on January 1 and Dec 31, 2020
Part 2 - On January 1,2020 Duke Company purchased as a trading investment 1.000 ordinary shares of Princess Company par value $100, for $120,000. On November 1, received cash dividend $5/share. On Dec 31, fair value of share is $121, and Princess Co reported net Income $1.000.000.
Instructions -
a. Prepare journal entries on January 1, November 1, and Dec 31, 2020?
b. If Duke company has a significant influence (30%) in Princess Company, prepare journal for January 1, November 1 and Dec 31 2020.
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