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Cardinal Paz Corp carries an account in its general ledger called Investments

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Cardinal Paz Corp carries an account in its general ledger called Investments;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.1,2012 Sharapova Company common stock, $107par,214shares $44,900;April1 U.S. government bonds,10%, due April 1, 2022, interest payable April 1 and October 1,115bonds of $1,000par each 115,000;July1 McGrath Company12% bonds, par $53,600, dated March 1, 2012, purchased at 104 plus accrued interest, interest payable annually on March 1, due March 1, 2032 57,888;(a) Prepare entries necessary to classify the amounts into proper accounts, assuming that all the securities are classified as available-for-sale. (Credit account titles are automatically indented when amount is entered. Do not indent manually.);Account Titles and Explanation Debit Credit;pixel.gif pixel.gif pixel.gif;pixel.gif pixel.gif pixel.gif;pixel.gif pixel.gif pixel.gif;pixel.gif pixel.gif pixel.gif;(b) Prepare the entry to record the accrued interest and the amortization of premium on December 31, 2012, using the straight-line method. (Round answers to 0 decimal places, e.g. $2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually.);Account Titles and Explanation Debit Credit;pixel.gif pixel.gif pixel.gif;pixel.gif pixel.gif pixel.gif;pixel.gif pixel.gif pixel.gif;(c) The fair values of the investments on December 31, 2012, were;Sharapova Company common stock $32,270;U.S. government bonds 148,840;McGrath Company bonds 66,510;What entry or entries, if any, would you recommend be made?(Round answers to 0 decimal places, e.g. $2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually.);Account Titles and Explanation Debit Credit;pixel.gif pixel.gif pixel.gif;pixel.gif pixel.gif pixel.gif;(d) The U.S. government bonds were sold on July 1, 2013, for $119,860plus accrued interest. Give the proper entry.(Credit account titles are automatically indented when amount is entered. Do not indent manually.);Account Titles and Explanation Debit Credit;pixel.gif pixel.gif pixel.gif;pixel.gif pixel.gif pixel.gif;pixel.gif pixel.gif pixel.gif;pixel.gif

 

Paper#28662 | Written in 18-Jul-2015

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