Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $23,500. July 5 Sold all of the Mattel bonds for $35,850. July 22 Purchased Sara Lee notes for $13,500. August 19 Purchased Kodak bonds for $15,300. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 Sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara Lee notes for $9,750. Sold all of the Kodak bonds for $20,475. November 1 December 31 Fair values for debt in the portfolio are Black & Decker, $54,600, and Microsoft, $158,600.

Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $23,500. July 5 Sold all of the Mattel bonds for $35,850. July 22 Purchased Sara Lee notes for $13,500. August 19 Purchased Kodak bonds for $15,300. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 Sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara Lee notes for $9,750. Sold all of the Kodak bonds for $20,475. November 1 December 31 Fair values for debt in the portfolio are Black & Decker, $54,600, and Microsoft, $158,600.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 5RE

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Soto Industries Inc. is an athletic footware company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Soto Industries Inc., which has a fiscal year ending on December 31: Instructions 1. Journalize the entries to record these transactions. 2. If the bond portfolio is classified as available for sale, what impact would this have on financial statement disclosure?
Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. A. a credit to cash for $28,733 B. a debit to interest expense for $31,267 C. a debit to Discount on Bonds Payable for $1,267 D. a debit to Premium on Bonds Payable for $1.267
Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 Sold all of the Johnson & Johnson bonds for $23,500. Sold all of the Mattel bonds for $35,850. April 15 July 5 July 22 August 19 Purchased Sara Lee notes for $13,500. Purchased Kodak bonds for $15,300. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 Sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara Lee notes for $9,750. November 1 Sold all of the…
Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $28,500. February 9 Purchased Sony notes for $62,640. June 12 Purchased Mattel bonds for $48,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $31,100; Sony, $53,150; and Mattel, $56,950. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $31,500. July 5 Sold all of the Mattel bonds for $41,450. July 22 Purchased Sara Lee notes for $19,900. August 19 Purchased Kodak bonds for $20,900. December 31 Fair values for debt in the portfolio are Kodak, $22,125; Sara Lee, $20,000; and Sony, $64,000. Year 3 February 27 Purchased Microsoft bonds for $159,600. June 21 Sold all of the Sony notes for $64,000. June 30 Purchased Black & Decker bonds for $58,400. August 3 Sold all of the Sara…
Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $23,500. July 5 Sold all of the Mattel bonds for $35,850. July 22 Purchased Sara Lee notes for $13,500. August 19 Purchased Kodak bonds for $15,300. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 Sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara Lee notes for $9,750. November 1 Sold all of the…
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Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities.Year 1 January 20 Purchased Johnson & Johnson bonds for $25,000. February 9 Purchased Sony notes for $59,490. June 12 Purchased Mattel bonds for $45,000. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $26,900; Sony, $49,050; and Mattel, $55,950. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $28,000. July 5 Sold all of the Mattel bonds for $39,000. July 22 Purchased Sara Lee notes for $17,100. August 19 Purchased Kodak bonds for $18,450. December 31 Fair values for debt in the portfolio are Kodak, $18,900; Sara Lee, $16,500; and Sony, $63,000. Year 3 February 27 Purchased Microsoft bonds for $161,000. June 21 Sold all of the Sony notes for $61,200. June 30 Purchased Black & Decker bonds for $54,900. August 3 Sold all of the Sara…
Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $28,200. Purchased Sony notes for $64,890. Purchased Mattel bonds for $50,500. Fair values for debt in the portfolio are Johnson & Johnson, $33,500; Sony, $53,350; and Mattel, $58,750. February 9 June 12 December 31 Year 2 April 15 Sold all of the Johnson & Johnson bonds for $33,500. July 5 Sold all of the Mattel bonds for $42,850. July 22 Purchased Sara Lee notes for $20,500. August 19 Purchased Kodak bonds for $22,300. December 31 Fair values for debt in the portfolio are Kodak, $22,825; Sara Lee, $22,000; and Sony, $66,000. Year 3 February 27 Purchased Microsoft bonds for $159,800. June 21 Sold all of the Sony notes for $65,600. June 30 Purchased Black & Decker bonds for $60,400. August 3 Sold all of the Sara Lee notes for $18,750. November 1 Sold all of the…
Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities.Year 1 January 20 Purchased Johnson & Johnson bonds for $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $23,500. July 5 Sold all of the Mattel bonds for $35,850. July 22 Purchased Sara Lee notes for $13,500. August 19 Purchased Kodak bonds for $15,300. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 Sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara…
Paris Inc. began operations in Year 1. Following is a series of transactions and events involving its longterm debt investments in available-for-sale securities. Year 1 Mar. 10 Purchased Apple bonds for $30,600. Apr. 7 Purchased Ford notes for $56,250. Sep. 1 Purchased Polaroid bonds for $28,200. Dec. 31 Fair values for debt in the portfolio are Apple, $33,000; Ford, $54,600; and Polaroid, $29,400. Year 2 Apr. 26 Sold all of the Ford notes for $51,250. June 2 Purchased Duracell bonds for $34,650. June 14 Purchased Sears notes for $25,200. Nov. 27 Sold all of the Polaroid bonds for $30,600. Dec. 31 Fair values for debt in the portfolio are Apple, $31,000; Duracell, $32,400; and Sears, $27,600. Year 3 Jan. 28 Purchased Coca-Cola bonds for $40,000. Aug. 22 Sold all of the Apple bonds for $25,800. Sep. 3 Purchased Motorola notes for $84,000. Oct. 9 Sold all of the Sears notes for $28,800. Oct. 31 Sold all of the Duracell bonds for $27,000. Dec. 31 Fair values for debt in the portfolio are…
Counting Inc. began operations in Year 1, following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 Jan. 20 Purchased Disney bonds for $45,500. Feb. 9 Purchased notes of Target for $69,490. June 12 Purchased bonds of Game Stop for $35,000. Dec. 31 Fair values for debt in the portfolio are Disney $52,000, Target $65,000, and Game Stop $36,500. Year 2 Apr. 15 Sold all of the bonds of Disney for $52,000. July 5 Sold all of the bonds of Game Stop for $39,000. July 22 Purchased notes of McDonalds for $37,100. Aug. 19 Purchased bonds of Amazon for $28,450. Dec. 31 Fair values for debt in the portfolio are Target $71,000, McDonalds $38,000, Amazon $32,000 Prepare journal entries for the transactions
[The following information applies to the questions displayed below.] Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $28,200. February 9 Purchased Sony notes for $64,890. Purchased Mattel bonds for $50,500. June 12 December 31 Fair values for debt in the portfolio are Johnson & Johnson, $33,500; Sony, $53,350; and Mattel, $58,750. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $33,500. July 5 Sold all of the Mattel bonds for $42,850. July 22 Purchased Sara Lee notes for $20,500. August 19 Purchased Kodak bonds for $22,300. December 31 Fair values for debt in the portfolio are Kodak, $22,825; Sara Lee, $22,000; and Sony, $66,000. Year 3 February 27 Purchased Microsoft bonds for $159,800. June 21 Sold all of the Sony notes for $65,600. June 30 Purchased Black & Decker bonds for $60,400. August 3…