Question

On January 1, 2015, Fine Corporation purchased a held-for-collection debt investment from Henry Inc. for €65,118,...

On January 1, 2015, Fine Corporation purchased a held-for-collection debt investment from Henry Inc. for €65,118, with

a 6% return. The 5-year bond of Henry Inc. has a par value of €60,000 and nominal rate of 8%. The bond pays interest

twice a year, on January 1 and July 1 every year.

Fine Corporation also purchased 400 ordinary shares of Shark Inc. for €13,200 on March 20, 2015. Fine Corporation has

an active trading business model for this investment. On July 30, 2015, Fine Corporation received a cash dividend of

€3.25 per share. On December 31, 2015, the stock price of Shark Inc. is €34.50 per share.

Suppose you are working in Fine Corporation, please do the following:

1. Prepare all the journal entries related to the bond investment in 2015 (write necessary calculations if any.)

2.  Prepare all the journal entries related to the share investment in 2015 ( write necessary calculations if any. )

Account Debit Credit
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
On January 1, 2020, Jordan Inc. purchased 25% of the outstanding common stock of Melody Corporation...
On January 1, 2020, Jordan Inc. purchased 25% of the outstanding common stock of Melody Corporation at a cost of $450,000. Melody Corporation had 400,000 shares of common stock outstanding. At the date of purchase, the book value of Melody’s net assets was $1,500,000. Book value and fair value of net assets were the same for all balance sheet items except for machinery and inventory. The fair value exceeded the book value by $100,000 for machinery and $20,000 for the...
On January 1, 2018 Ivan Corporation purchased $300,000 shares of common stock in JJ, Inc. The...
On January 1, 2018 Ivan Corporation purchased $300,000 shares of common stock in JJ, Inc. The investment is a 40% interest in JJ, Inc. During 2018, JJ Inc., paid total dividends of $20,000 and reported total net income of $800,000. Using the equity method, prepare Ivan’s journal entries to record the following; (a) record the initial investment, (b) record dividends received, and (c) the year-end investment income.
DEBT SECURITIES 2. Using the following information, prepare journal entries for the year 2015 and indicate...
DEBT SECURITIES 2. Using the following information, prepare journal entries for the year 2015 and indicate how ABC should report its investment in its year end financial statements: • the investment is considered Held to maturity. • On July 1, 2015 ABC purchased $4,000,000 of XYZ’s 8% bonds, due on July 1, 2021. • The bonds, which pay interest semiannually on January 1 and July 1, were purchased for $3,645,470 to yield 10%. • The fair value at December 31,...
1. On March 1, 2015, Bowan Corporation issued 6% bonds dated February 1, 2015, the face...
1. On March 1, 2015, Bowan Corporation issued 6% bonds dated February 1, 2015, the face amount of $700,000. The bonds were sold for the present value of the bonds on March1, 2015 plus one-month accrued interest. The bonds mature on January 31, 2018. Interest is paid semiannually on July 31 and January 31. Bowan's fiscal year ends on December 31 each year. The effective interest rate is 8%.                                     Required:    a. Determine the present value the bonds...
Lorance Corporation issued $845,000, 9%, 10-year bonds on January 1, 2015, for $792,347. This price resulted...
Lorance Corporation issued $845,000, 9%, 10-year bonds on January 1, 2015, for $792,347. This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semiannually on July 1 and January 1. Lorance uses the effective-interest method to amortize bond premium or discount. 1)Prepare the journal entry to record the issuance of the bonds. 2)Prepare the journal entry to record the payment of interest and the discount amortization on July 1, 2015, assuming that interest was not...
On January 1, 2020, Woodson Corporation issued $800,000, 6%, 5-year bonds for $735,110. The bonds were...
On January 1, 2020, Woodson Corporation issued $800,000, 6%, 5-year bonds for $735,110. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid semiannually on July 1 and January 1. The company uses the effective-interest method of amortization. Instructions: Prepare the journal entries that Woodson Corporation would make on January 1, June 30, December 31, 2020, January 1, 2021 related to the bond issue. (b) Prepare the journal entries as of January 1, 2021 assuming the...
On January 1, 2020, Starchucks Corporation purchased 20,000 shares of Karfee, Inc. common stock for $30/share,...
On January 1, 2020, Starchucks Corporation purchased 20,000 shares of Karfee, Inc. common stock for $30/share, including brokerage commissions.   Karfee had 200,000 shares of common stock outstanding at the time Starchucks purchased its stock from another investor. Karfee common stock was trading at $33/share on December 31, 2020, and $26/share on December 31, 2021. Starchucks classifies its investment in Karfee as an available for sale investment.   December 31st is Starchucks’ fiscal year-end. Required (submit as a text entry and MUST...
Austin, Inc., acquired 10 percent of McKenzie Corporation on January 1, 2014 for $313,400. During 2014,...
Austin, Inc., acquired 10 percent of McKenzie Corporation on January 1, 2014 for $313,400. During 2014, McKenzie earned a net income of $287,000 while declaring and paying cash dividends of $108,000. On January 1, 2015, Austin purchased an additional 30 percent of McKenzie for $932,700. The initial 10 percent investment had been maintained at fair value, and the fair value of McKenzie on January 1, 2015 is implied by the second purchase. The equity method will now be applied. During...
On January 1, 2015, Jørgensen Inc. in Copenhagen, Denmark, issued kr. 800,000 of five-year, 4% bonds...
On January 1, 2015, Jørgensen Inc. in Copenhagen, Denmark, issued kr. 800,000 of five-year, 4% bonds to yield a market interest rate of 5%, which resulted in a discount price of 95.62. Interest is paid semi-annually on January 1 and July 1. (Currency in Danish kroner, kr.) Instructions: Work out a complete amortization schedule on the bonds. (30%) Prepare the journal entries to record the following: (20%) The issuance of the bonds on January 1, 2015 The payment of interest...
On January 1, 2015, BeWell Company purchased 10% of common stock of DoingWell Co for $450,000...
On January 1, 2015, BeWell Company purchased 10% of common stock of DoingWell Co for $450,000 and classified it as Available for Sale securities. BeWell does not have significant influence on Doingwell Company. DoingWell reported net income of $27,000 for the year and paid dividends of $9,000. On Dec 31, 2015 the Fair Value of this investment was $420,000 Required: Prepare the appropriate journal entries on Jan 1, 2015 and December 31, 2015 to record the above transactions including year...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT