FF&T Corporation is a confectionery wholesaler thatfrequently buys and sells securities to meet various investmentobjectives. The following selected transactions relate toFF&Tâs investment activities during the last two months of2016. At November 1, FF&T held $75 million of 30-year, 8% bondsof Convenience, Inc., purchased May 1, 2016, at face value.Management has the positive intent and ability to hold the bondsuntil maturity. FF&Tâs fiscal year ends on December 31. Nov. 1Received semiannual interest of $3.0 million from the Convenience,Inc., bonds. Dec. 1 Purchased 10% bonds of Facsimile Enterprises attheir $72 million face value, to be held until they mature in 2026.Semiannual interest is payable May 31 and November 30. 31 PurchasedU.S. Treasury bills that mature in two months for $10.7 million. 31Recorded any necessary adjusting entry(s) relating to theinvestments. The fair values of the investments at December 31were: Convenience bonds $ 71.7 million Facsimile Enterprises bonds72.9 million U.S. Treasury bills 10.7 million
Required: Prepare the appropriate journal entry for eachtransaction or event. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field. Enter your answers in millions rounded to 1 decimalplace (i.e., 5,500,000 should be entered as 5.5).)
1.Received semiannual interest of $3.0 million from theConvenience, Inc., bonds.
2.Purchased 10% bonds of Facsimile Enterprises at their $72.0million face value, to be held until they mature in 2026.Semiannual interest is payable May 31 and November 30.
3.Purchased U.S. Treasury bills that mature in two months for$10.7 million.
4.Recorded any necessary adjusting entry(s) relating to theinvestments.
so there should be 4 journal entries
FF&T Corporation is a confectionery wholesaler thatfrequently buys and sells securities to meet various investmentobjectives. The following selected transactions relate toFF&Tâs investment activities during the last two months of2016. At November 1, FF&T held $75 million of 30-year, 8% bondsof Convenience, Inc., purchased May 1, 2016, at face value.Management has the positive intent and ability to hold the bondsuntil maturity. FF&Tâs fiscal year ends on December 31. Nov. 1Received semiannual interest of $3.0 million from the Convenience,Inc., bonds. Dec. 1 Purchased 10% bonds of Facsimile Enterprises attheir $72 million face value, to be held until they mature in 2026.Semiannual interest is payable May 31 and November 30. 31 PurchasedU.S. Treasury bills that mature in two months for $10.7 million. 31Recorded any necessary adjusting entry(s) relating to theinvestments. The fair values of the investments at December 31were: Convenience bonds $ 71.7 million Facsimile Enterprises bonds72.9 million U.S. Treasury bills 10.7 million
Required: Prepare the appropriate journal entry for eachtransaction or event. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field. Enter your answers in millions rounded to 1 decimalplace (i.e., 5,500,000 should be entered as 5.5).)
1.Received semiannual interest of $3.0 million from theConvenience, Inc., bonds.
2.Purchased 10% bonds of Facsimile Enterprises at their $72.0million face value, to be held until they mature in 2026.Semiannual interest is payable May 31 and November 30.
3.Purchased U.S. Treasury bills that mature in two months for$10.7 million.
4.Recorded any necessary adjusting entry(s) relating to theinvestments.
so there should be 4 journal entries
Related questions
Amalgamated General Corporation is a consulting firm that alsooffers financial services through its credit division. From time totime the company buys and sells securities intending to earnprofits on short-term differences in price. The following selectedtransactions relate to Amalgamated's investment activities duringthe last quarter of 2016 and the first month of 2017. The onlysecurities held by Amalgamated at October 1 were $45 million of 10%bonds of Kansas Abstractors, Inc., purchased on May 1 at facevalue. The company's fiscal year ends on December 31.
2016
Oct. 18 Purchased 2 million preferred shares of MillworkVentures Company for $72 million as a speculative investment to besold under suitable circumstances.
Oct. 31 Received semiannual interest of $2.7 million from theKansas Abstractors bonds.
Nov. 1 Purchased 10% bonds of Holistic Entertainment Enterprisesat their $66 million face value, to be held until they mature in2018. Semiannual interest is payable April 30 and October 31.
Nov. 1 Sold the Kansas Abstractors bonds for $41 million becauserising interest rates are expected to cause their fair value tocontinue to fall.
Dec. 1 Purchased 12% bonds of Household Plastics Corporation attheir $70 million face value, to be held until they mature in 2028.Semiannual interest is payable May 31 and November 30.
Dec. 20 Purchased U. S. Treasury bonds for $6.6 million astrading securities, hoping to earn profits on short-termdifferences in prices.
Dec 21. Purchased 4 million common shares of NXS Corporation for$64 million as trading securities, hoping to earn profits onshort-term differences in prices.
Dec. 23 Sold the Treasury bonds for $6.9 million.
Dec. 29 Received cash dividends of $3 million from the MillworkVentures Company preferred shares.
Dec. 31 Recorded any necessary adjusting entry(s) and closingentries relating to the investments. The market price of theMillwork Ventures Company preferred stock was $34.50 per share and$17.50 per share for the NXS Corporation common. The fair values ofthe bond investments were $63.7 million for Household PlasticsCorporation and $17.7 million for Holistic EntertainmentEnterprises.
2017
Jan. 7 Sold the NXS Corporation common shares for $60million.
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Prepare the appropriate journal entry for each transaction orevent. (If no entry is required for a transaction/event,select "No journal entry required" in the first account field.Enter your answers in millions rounded to 1 decimal place, (i.e.,5,500,000 should be entered as 5.5).) |
