ACCT 410-3 - E5-3(Investments Aslan County purchased...

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E5-3 (Investments) Aslan County purchased $3,000,000 of bonds as a General Fund investment on March 1, 20X7, for $3,060,000 plus four months accrued interest of $80,000. The bonds mature in four years and two months. 1. The county received the semiannual interest payment on the bonds ($120,000) on April 30, 20X7. 2. The county received the October 31 semiannual interest payment ($120,000). 3. On December 31, the end of Aslan’s fiscal year, the fair value of its bond investment was $3,065,000 (excluding accrued interest). (a) Record these transactions in the General Ledger accounts of the Aslan County General Fund. (b) Compute the investment income that should be reported for this
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Unformatted text preview: investment. A.) DEBIT CREDIT Accounts Investments $3,060,00 Accrued Interest Receivable $80,000 Cash $3,140,0 00 (Records Frst investment purchase) 1. Cash $120,000 Accrued Interest Receivable $120,000 (Records interest payment on April 30, 20X7) 2. Cash $120,000 Accrued Interest Receivable $120,000 (Records interest payment on 31 October) 3. Investments Revenues $5,000 Increase in ±air Value of Investments $5,000 (Records investments’ fair value change on 31 December) B.) The accrued interest would be recognized as revenue. Interest Income $ 80,000 Add: Interest Income $120,000 $200,000 Add: Net Increase $ 5,000 Total Investment $205,000...
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  • Fall '14
  • semiannual interest payment, Aslan County, Aslan County General Fund

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