"3-3-2010

"3-3-2010 - PROBLEM 17-7(a February 1...

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PROBLEM 17-7 (a) February 1 Available-for-Sale Securities. ............................................................ 300,000 Interest Revenue (4/12 x .10 x $300,000). ......................................... 10,000 Cash. ......................................................................................... 310,000 April 1 Cash . .................................................................................... 15,000 Interest Revenue ($300,000 x .10 x 6/12). ............................... 15,000 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 [($60,000 x 99%) + ($60,000 x .10 x 5/12)]. ............................ 61,900 Loss on Sale of Securities. ................................................................. 600 Available-for-Sale Securities. .................................................. 60,000 Interest Revenue (5/12 x .10 x $60,000 = $2,500). .......................................... 2,500 October 1 Cash [($300,000 – $60,000) x .10 x 6/12]. ......................................... 12,000 Interest Revenue. ...................................................................... 12,000 December 1 Cash ($200,000 x 9% x 6/12). ............................................................ 9,000 Interest Revenue. ...................................................................... 9,000 1
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PROBLEM 17-7 (Continued) December 31 Interest Receivable. ............................................................................ 7,500 Interest Revenue. ...................................................................... 7,500 (3/12 x $240,000 x .10 = $6,000) (1/12 x $200,000 x .09 = $1,500) ($6,000 + $1,500 = $7,500) December 31 Unrealized Holding Gain or Loss—Equity. ....................................... 26,000 Securities Fair Value Adjustment (Available-for-Sale). ............................................................. 26,000 Available-for-Sale Portfolio Security Cost Market Unrealized Gain (Loss) Gibbons Co. $240,000 $228,000* $(12,000)
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"3-3-2010 - PROBLEM 17-7(a February 1...

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