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Prepare the appropriate journal entries from the purchase through the end of the year.




Hello, I would like help with this homework assignment. Will you review it and let me know if you can help me?;Attachment Preview;Week 4's homework assignment.docx Download Attachment;Exercises E12-1, E12-5, E12-7, and E12-14;E 121: Securities held-to-maturity, bond investment, effective interest;LO121;Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds;dated July 1, on July 1, 2013. Company management has the positive intent and ability to hold;the bonds until maturity. The market interest rate (yield) was 8% for bonds of similar risk and;maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest;semiannually on June 30 and December 31. As a result of changing market conditions, the fair;value of the bonds at December 31, 2013 was $210 million.;Required;1. Prepare the journal entry to record Tanner-UNFs investment in the bonds on July 1;2013.;the;2. Prepare the journal entry by Tanner-UNF to record interest on December 31, 2013, at;effective (market) rate.;3. At what amount will Tanner-UNF report its investment in the December 31, 2013;balance sheet? Why?;4. Suppose Moodys bond rating agency downgraded the risk rating of the bonds;motivating Tanner-UNF to sell the investment on January 2, 2014, for $190 million. Prepare the;journal entry to record the sale.;125: Various transactions relating to trading securities;LO122;Rantzow-Lear Company buys and sells securities expecting to earn profits on short-term;differences in price. The companys fiscal year ends on December 31. The following selected;transactions relating to Rantzow-Lears trading account occurred during December 2013 and;the first week of 2014.;2013;Dec. 17 Purchased 100,000 Grocers Supply Corporation preferred shares for $350,000.;28 Received cash dividends of $2,000 from the Grocers Supply Corporation preferred;shares.;31 Recorded any necessary adjusting entry relating to the Grocers Supply Corporation;preferred shares. The market price of the stock was $4 per share.;2014;Jan.5 Sold the Grocers Supply Corporation preferred shares for $395,000.;Required;1. Prepare the appropriate journal entry for each transaction.;2. Indicate any amounts that Rantzow-Lear Company would report in its 2013 balance;sheet and income statement as a result of this investment.;E 127: Securities available-for-sale, adjusting entries;LO123;Loreal-American Corporation purchased several marketable securities during 2013. At;December 31, 2013, the company had the investments in common stock listed below. None was;held at the last reporting date, December 31, 2012, and all are considered securities availablefor-sale.;Required;1. Prepare the appropriate adjusting entry at December 31, 2013.;2. What amounts would be reported in the income statement at December 31, 2013, as a;result of the adjusting entry?;E 1214: Investment securities and equity method investments compared;LO123, LO124, LO125;As a long-term investment, Painters Equipment Company purchased 20% of AMC Supplies;Inc.s 400,000 shares for $480,000 at the beginning of the fiscal year of both companies. On the;purchase date, the fair value and book value of AMCs net assets were equal. During the year;AMC earned net income of $250,000 and distributed cash dividends of 25 cents per share. At;year-end, the fair value of the shares is $505,000.;Required;1. Assume no significant influence was acquired. Prepare the appropriate journal entries;from the purchase through the end of the year.;2. Assume significant influence was acquired. Prepare the appropriate journal entries from;the purchase through the end of the year.


Paper#19400 | Written in 18-Jul-2015

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