Week 4 P13-11 Comprehensive Problem Solution

Week 4 P13-11 Comprehensive Problem Solution - Week 4...

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Week 4 Wednesday Comprehensive Problem P13-11 1. 2013 Jan. 1 Investment in Available-for-Sale Securities ............ 29,100 Cash ................................................................. 29,100 1 Investment in Available-for-Sale Securities ............ 40,400 Cash ................................................................. 40,400 June 30 Cash ($30,000 0.08 1/2) ..................................... 1,200 Investment in Available-for-Sale Securities ............ 255 Interest Income ($29,100 0.10 1/2) ............ 1,455 30 Cash ($40,000 0.10 1/2) ................................... 2,000 Investment in Available-for-Sale Securities ...... 20 Interest Income ($40,400 0.098 1/2) .......... 1,980 30 Allowance for Change in Fair Value of Investment. 225* Unrealized Holding Gain/Loss: Available-for-Sale Securities .......................... 225 Cumulative Amortized 6/30/13 Change in *Security Cost Fair Value Fair Value $30,000 face value of Bradford Co. bonds $29,355 a $29,160 $(195) $40,000 face value of Morris Co. bonds 40 ,380 b 40 ,800 420 Totals $69 ,735 $69 ,960 $ 225 a $29,100 cost + $255 amortization of discount b $40,400 cost – $20 amortization of premium
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P13-11 (continued) July 1 Investment in Available-for-Sale Securities ............ 23,000 Cash ................................................................. 23,000 Nov. 30 Interest Receivable ($25,000 0.11 5/12) .......... 1,146 Investment in Available-for-Sale Securities ............ 4 Interest Income ($23,000 0.12 5/12) .......... 1,150 30 Cash [($22,750 + $1,146] ..................................... 23,896 Loss on Sale of Available-for-Sale Securities .......... 254*
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