+
ACCT 221 WEEK 2 HOMEWORK

ACCT 221 WEEK 2 HOMEWORK

Rating:
Rating
(0)
Author: Joyce Buda
Description:

http://theperfecthomework.com/acct-221-week-2-homework/

On 1/1/2015, Starburst Company issued 10-year bonds with a face value of $500,000 at 102. The bonds carry a stated interest rate of 7%, with
interest payable semi-annually on January 1 and July 1. Starburst uses the straight-line method of amortizing bond premium or discount.
 
 
 
 
 
 
 
(a) Prepare the journal entry to record the issuance of the bonds.
 
 
 
 
(b) Prepare the journal entry to record payment of interest on July 1, 2015. 
 
 
 
 
(c) Prepare the adjusting entry to record the accrual of interest on December 31, 2015.
 
 
 
(d) Prepare the balance sheet presentation for the bond on 12/31/2015.
 
 
 
 
(e) Prepare the balance sheet presentation for the bond on 12/31/2016.
 
 
 
 
 
 
 
 
 
 
Black, Inc. management occasionally invests idle cash in stocks that are not intended to be held long term.
 
Management treats these investments as trading securities.
 
 
 
 
 
 
1.5.2015
Purchased 2,500 shares of Eversilver Corporation common stock, which constitutes less than 10% of the outstanding
 
shares of the company, for $54.00 per share cash plus a total broker commission of $200.
 
6.15.2015
Received a cash dividend of $1.50 per share.
 
 
12.15.2015
Received a cash dividend of $1.60 per share.
 
 
12.31.2015
The market value of the stock is $60 per share as of year end, and a commission of $200 would apply to sell the shares.
1.22.2016
Sold 1,000 shares of Eversilver Corporation common stock for $62 per share minus $120 commission.
 
 
 
 
 
 
 
 
Instructions: Prepare Journal entries for the above transactions.
 
 
 
 
 
 
White Corporation acquired 50,000 shares of the outstanding common stock of Gold Company for $12.00 per share.
 
 
 
The following events occurred during the year.
 
 
 
 
 
 
 
 
 
15.06.15
Gold declared and paid $0.50 per share cash dividend.
 
 
 
 
 
10.12.15
Gold declared and paid $0.55 per share cash dividend.
 
 
 
 
 
31.12.15
Gold reported net income for the year of $325,000. The market price of Gold common stock was $25 per share on the last day of the year.
 
 
 
 
 
 
 
Instructions:
 
 
 
 
 
 
(a) Prepare the journal entries for White in 2015, assuming that the purchase of Gold stock constituted less than 10% of Gold's outstanding shares.
 
White treats this investment as available-for-sale securities.
 
 
 
 
 
 
 
 
 
 
 
 
(b) Prepare the journal entries for White in 2015, assuming that the purchase of Gold stock constituted 30% of Gold's outstanding shares.
 
 
 
 
 
 
 


(more)
See More
Try a College Course Free

Sophia’s self-paced online courses are a great way to save time and money as you earn credits eligible for transfer to over 2,000 colleges and universities.*

Begin Free Trial
No credit card required

25 Sophia partners guarantee credit transfer.

226 Institutions have accepted or given pre-approval for credit transfer.

* The American Council on Education's College Credit Recommendation Service (ACE Credit®) has evaluated and recommended college credit for 20 of Sophia’s online courses. More than 2,000 colleges and universities consider ACE CREDIT recommendations in determining the applicability to their course and degree programs.

Tutorial