Question

Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price,...

Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2021 and the first week of 2022.

2021
Dec. 17 Purchased 115 Grocers’ Supply Corporation bonds at par for $402,500.
28 Received interest of $2,600 from the Grocers’ Supply Corporation bonds.
31 Recorded any necessary adjusting entry relating to the Grocers’ Supply Corporation bonds. The market price of the bond was $4,000 per bond.
2022
Jan. 5 Sold the Grocers' Supply Corporation bonds for $437,000.


Required:
1. Prepare the appropriate journal entry or entries for each transaction.
2. Indicate any amounts that Rantzow-Lear Company would report in its 2021 balance sheet and income statement as a result of this investment.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price,...
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2021 and the first week of 2022. 2021 Dec. 17 Purchased 180 Grocers’ Supply Corporation bonds at par for $450,000. 28 Received interest of $5,200 from the Grocers’ Supply Corporation bonds. 31 Recorded any necessary adjusting...
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price....
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2018 and the first week of 2019. 2018 Dec. 17 Purchased 145 Grocers' Supply Corporation bonds for $652,500. 28 Received interest of $3,800 from the Grocers’ Supply Corporation bonds. 31 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market...
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price....
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2018 and the first week of 2019. 2018 Dec. 17 Purchased 135 Grocers' Supply Corporation bonds for $607,500. 28 Received interest of $3,400 from the Grocers’ Supply Corporation bonds. 31 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market...
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price....
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2018 and the first week of 2019. 2018 Dec. 17 Purchased 100 Grocers' Supply Corporation bonds at par for $350,000. 28 Received interest of $2,000 from the Grocers’ Supply Corporation bonds. 31 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds....
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price....
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2018 and the first week of 2019. 2018 Dec. 17 Purchased 180 Grocers' Supply Corporation bonds for $450,000. 28 Received interest of $5,200 from the Grocers’ Supply Corporation bonds. 31 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market...
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price....
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2018 and the first week of 2019. 2018 Dec. 17 Purchased 165 Grocers' Supply Corporation bonds for $577,500. 28 Received interest of $4,600 from the Grocers’ Supply Corporation bonds. 31 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market...
S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On...
S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On December 27, 2021, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2022, for $880,000. At December 31, the bonds had a fair value of $873,000. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2021 and (b) the sale of the bonds in 2022 1) Record the unrealized gains or losses occurring at...
1.) Axel Company buys and sells securities expecting to earn profits on short-term differences in price....
1.) Axel Company buys and sells securities expecting to earn profits on short-term differences in price. During 2016, Axel Company purchased the following trading securities: Security                      Cost                             Fair Value (Dec. 31, 2016) A                                  P195,000                    P225,000 B                                  300,000                      162,000 C                                  660,000                      678,000 Before any adjustments related to these trading securities, Axel Company had net income of P900,000.       What is Axel’s net income after making any necessary trading security adjustments? Net income before trading security adjustment _____________ Unrealized loss (P1,155,000-P1,065,000) ____________ Net...
S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On...
S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2019, for $880,000. At December 31, the bonds had a fair value of $873,000. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2018 and (b) the sale of the bonds in 2019.
S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On...
S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2019, for $880,000. At December 31, the bonds had a fair value of $873,000. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2018 and (b) the sale of the bonds in 2019.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT