&quot;3-3-2010

# &quot;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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&quot;3-3-2010 - PROBLEM 17-7(a February 1...

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