Accounting Notes Essay

916 WordsNov 3, 20134 Pages
Journal Entry for the purchase of a held to maturity debt securities @ a Discount 1/1/2012 Debt Investments 92,278(carrying value) Cash 92,278(carrying value) Journal Entry to record the receipt of the 1st semiannual interest payment on July 1,2012 7/1/1/11 Cash 4,000 Debt Investments 614 Interest Revenue 4,614 To record the entry for the end of the year it accrues interest and amortized the discount 12/31/11 Interest Receivable 4,000 Debt Investments 645 Interest Revenue 4,645 The JE @ premium 12/31/11 Cash 60,000 Debt Investments 6209.26 (amort. Amount) Interest Revenue 53,790.74 JE for the Fair Value Adjustment:(if positive – debit balance) Fair Value Adjustment (Available-for-Sale) 1,300 Unrealized Holding Gain or Loss-Equity 1,300 JE for the Fair value Adjustment:(if negative - credit balance Unrealized Holding Gain or Loss 1,400 Fair Value Adjustment Avail – for Sale) 1,400 JE for the sale of a security (avail for sale) Net Proceeds from Sale of Sec. A 15,300 Cost of Security A 17,500 Loss on investment (2,200) 1/20/13 Cash 15,300 Loss on sale of investments 2,200 Equity Investments (AFS) 17,500 If there had been a loss: JE would be Unrealized holding gain or loss 1,732 Fair Value Adjustments (Avail. For Sale) 1,732 The sale of an available for sale security JE: Amortized Cost 92,214 Loss: Selling Price of bonds 90,000 Loss: on Sale of bond (4,214) 7/1/13 Cash 90000 Loss on Sale of Investment 4,214 Debt Investments 94,214 Trading Securities: Fair Value Adjustment (trading) 3,750 Unrealized Holding Gain 3,750 INVESTMENTS IN EQUITY SECURITES Fair Value Method Equity Method On Jan. 2, 2012 Maxi Company acquired 48,000 shares (20% of Mini Company common stock) at a cost of $ 10 a share. Equity Investments

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