Class20 - Solutions

Class20 - Solutions - PROBLEM 17-7(a February 1...

This preview shows pages 1–3. Sign up to view the full content.

PROBLEM 17-7 (a) February 1 Available-for-Sale Securities. ....................... 500,000 Interest Revenue (4/12 x .12 x \$500,000). .... 20,000 Cash. ........................................................ 520,000 April 1 Cash. ............................................................... 30,000 Interest Rev. (\$500,000 x .12 x 6/12). ..... 30,000 July 1 Available-for-Sale Securities. ....................... 200,000 Interest Revenue (1/12 x .09 x \$200,000). .... 1,500 Cash. ........................................................ 201,500 September 1 Cash. ................................................................ 104,000 [(\$100,000 x 99%) + (\$100,000 x .12 x 5/12)] Loss on Sale of Securities. ........................... 1,000 Available-for-Sale Securities. ................. 100,000 Interest Revenue. .................................... 5,000 (5/12 x .12 x \$100,000 = \$5,000) October 1 Cash [(\$500,000 – \$100,000) x .12 x 6/12]. ... 24,000 Interest Revenue. .................................... 24,000 December 1 Cash (\$200,000 x 9% x 6/12). ......................... 9,000 Interest Revenue. .................................... 9,000 1

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
PROBLEM 17-7 (Continued) December 31 Interest Receivable. ....................................... 13,500 Interest Revenue. .................................... 13,500 (3/12 x \$400,000 x .12 = \$12,000) (1/12 x \$200,000 x .09 = \$1,500) (\$12,000 + \$1,500 = \$13,500) December 31 Unrealized Holding Gain or Loss—Equity. .. 34,000 Securities Fair Value Adjustment (Available-for-Sale). ............................ 34,000 Available-for-Sale Portfolio Security Cost Market Unrealized Gain (Loss) Hilton Paris Co. \$400,000 \$380,000* \$(20,000) Chieftains, Inc. 200,000 186,000 ** (14,000 ) Total \$600,000 \$566,000 \$34,000 *\$400,000 x 95% **\$200,000 x 93% (Note to instructor: Some students may debit Interest Receivable at date of
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 6

Class20 - Solutions - PROBLEM 17-7(a February 1...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online