Recall 3 year-old Manny, at the beginning of the chapter, who has & a seizure disorder. He receives his care in a mobile van sent to his community by the….
Prepare the journal entries for each of the items (a) to (j) above.
The following are various transactions that relate to the investment portfolio for Zeus Corp., a publically traded corporation. The portfolio is made up of debt and equity instruments all purchased in the current year and accounted for as held-for-trading (HFT). The investee’s year-end is December 31.
a. On February 1, the company purchased Xtra Corp. 12% bonds, with a par value of $500,000, at 106.5 plus accrued interest to yield 10%. Interest is payable April 1 and October 1.
b. On April 1, semi-annual interest was received on the Xtra bonds.
c. On July 1, 9% bonds of Vericon Ltd. were purchased. These bonds, with a par value of $200,000, were purchased at 101 plus accrued interest to yield 8.5%. Interest dates are June 1 and December 1.
d. On August 12, 3,000 shares of Bretin ACT Corp. were acquired at a cost of $59 per share. A 1% commission was paid.
e. On September 1, Xtra Corp. bonds with a par value of $100,000 were sold at 104 plus accrued interest.
f. On September 28, a dividend of $0.50 per share was received on the Bretin ACT Corp. bonds.
g. On October 1, semi-annual interest was received on the remaining Xtra Corp. bonds.
h. On December 1, semi-annual interest was received on the Vericon Ltd. bonds.
i. On December 28, a dividend of $0.52 per share was received on the Bretin ACT Corp. shares.
j. On December 31, the following fair values were determined: Xtra Corp. 101.75; Vericon Ltd. bonds 97; and Bretin ACT Corp. shares $60.50.
Required: Prepare the journal entries for each of the items (a) to (j) above. The company wishes to record interest income separately from other investment gains and losses.