405ch17summer2011

405ch17summer2011 - EXERCISE 17-3 (1520 minutes) (a)...

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EXERCISE 17-3 (15–20 minutes) (a) January 1, 2009 Held-to-Maturity Securities. ............................... 537,907.40 Cash. ............................................................. 537,907.40 (b) Schedule of Interest Revenue and Bond Premium Amortization Effective-Interest Method 12% Bonds Sold to Yield 10% Date Cash Received Interest Revenue Premium Amortized Carrying Amount of Bonds 1/1/09 $537,907.40 12/31/09 $60,000 $53,790.74 $6,209.26 531,698.14 12/31/10 60,000 53,169.81 6,830.19 524,867.95 12/31/11 60,000 52,486.80 7,513.20 517,354.75 12/31/12 60,000 51,735.48 8,264.52 509,090.23 12/31/13 60,000 50,909.77* * 9,090.23 500,000.00 *Rounded by 75¢.
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EXERCISE 17-3 (Continued) (c) December 31, 2009 Cash. ....................................................................... 60,000 Held-to-Maturity Securities. ......................... 6,209.26 Interest Revenue. .......................................... 53,790.74 (d) December 31, 2010 Cash. ....................................................................... 60,000 Held-to-Maturity Securities. ......................... 6,830.19 Interest Revenue. .......................................... 53,169.81 EXERCISE 17-7 (10–15 minutes) (a) December 31, 2010 Unrealized Holding Gain or Loss—Income. ............ 1,400 Securities Fair Value Adjustment (Trading). ... 1,400 (b) During 2011 Cash. ........................................................................... 9,500 Loss on Sale of Securities. ....................................... 500 Trading Securities. ............................................. 10,000
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EXERCISE 17-7 (Continued) (c) December 31, 2011 Securities Cost Fair Value Unrealized Gain (Loss) Stargate Corp. stock $20,000 $19,300 ( $ (700) Vectorman Co. stock 20,000 20,500 ( 500 ) Total of portfolio $40,000 $39,800 ( (200) Previous securities fair value adjustment balance—Cr. ( (1,400 ) Securities fair value adjustment—Dr. ( $1,200 ) Securities Fair Value Adjustment (Trading). ............... 1,200 Unrealized Holding Gain or Loss— Income. ............................................................... 1,200
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EXERCISE 17-9 (10–15 minutes) (a) The portfolio should be reported at the fair value of $54,500. Since the cost of the portfolio is $53,000, the unrealized holding gain is $1,500, of which $200 is already recognized. Therefore, the December 31, 2010 adjusting entry should be: Securities Fair Value Adjustment (Available-for-Sale). ..................................................... 1,300 Unrealized Holding Gain or Loss—Equity. ............ 1,300
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This note was uploaded on 11/05/2011 for the course ACCT 405 taught by Professor Caylor during the Summer '11 term at South Carolina.

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405ch17summer2011 - EXERCISE 17-3 (1520 minutes) (a)...

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