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Cardinal Paz Corp - available for sale securities - 18 Aug, 2012

Cardinal Paz Corp.

 

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, 2010 Sharapova Company common stock, $100 par, 200 shares         $37,400

April 1 U.S. government bonds, 11%, due April 1, 2020,

interest payable April 1 and October 1, 110 bonds of $1,000 par each  110,000

July 1 McGrath Company 12% bonds, par $50,000, dated March 1,

2010 purchased at 104 plus accrued interest, interest payable

annually on March 1, due March 1, 2030                                                          54,000

 

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

 

Prepare the entry to record the accrued interest and the amortization of premium on December 31, 2010, using the straight-line method.

 

The fair values of the securities on December 31, 2010, were:

Sharapova Company common stock                 $31,800

U.S. government bonds                                    124,700

McGrath Company bonds                                58,600

 

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

 

The U.S. government bonds were sold on July 1,2011, for $119,200 plus accrued interest. Give the proper entry.



Category : Financial Accounting

Search Keywords :
Cardinal , Paz , Investments , Sharapova , Mcgrath , Available-for-sale , Journal , Entry 


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Answer  - 18 Aug, 2012
Please see the doc attachment....


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