Solution Manual for Accounting 29th Edition by Carl Warren
Table of Content
TOPIC 1: INVESTMENTS ASSIGNMENTS
B1–1
Held-to-maturity, trading, and available-for-sale securities
B1–2
The primary objective of investing in held-to-maturity securities is to earn interest revenue and collect the face value of the security at its maturity date.
B1–3
Cost method
B1–4
Held-to-maturity securities that will mature within one year are reported as current assets. Securities maturing beyond one year are reported as long-term assets.
B1–5 a.
b.
c.
d.
Investments—Vasquez City Bonds
420,000
Interest Receivable
6,300
Cash
Cash ($420,000 × 6% × 1/2)
12,600
426,300
Interest Receivable
6,300
Cash
Interest Revenue
Loss on Sale of Investments
208,950*
6,300
2,100
Interest Revenue
1,050
Investments—Vasquez City Bonds
210,000
* Sales proceeds ($210,000 × 99%)…………………………………… Accrued interest………………………………………………………… Total proceeds from sale………………………………………………
Cash
Investments—Vasquez City Bonds
$207,900 1,050 $208,950
210,000
210,000
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