Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. Fr
Posted: Thu May 19, 2022 2:55 pm
Amalgamated General Corporation is a consulting firm that also
offers financial services through its credit division. From time to
time the company buys and sells securities. The following selected
transactions relate to Amalgamated’s investment activities during
the last quarter of 2021 and the first month of 2022. The only
securities held by Amalgamated at October 1, 2021 were $36 million
of 10% bonds of Kansas Abstractors, Inc., purchased on May 1, 2021
at face value and held in Amalgamated’s trading securities
portfolio. The company’s fiscal year ends on December 31.
Required:
Prepare the appropriate journal entry for each transaction or
event. Use one summary entry on December 31 to adjust the portfolio
of equity investments to fair value. (If no entry is
required for a transaction/event, select "No journal entry
required" in the first account field. Do not round
intermediate calculations. Enter your answers in millions rounded
to 1 decimal place, (i.e., 5,500,000 should be entered as
5.5).)
Answer is not complete. No Date General Journal Debit Credit 1 Oct 18, 2021 Investment in equity securities 59.0 Cash ✓ 59.0 2 Oct 31, 2021 Cash 1.8 Interest revenue 1.8 3 Nov 01, 2021 Investment in bonds 18.0 Cash 18.0 4 Nov 01, 2021 x Cash Loss on investment (unrealized, NI) 34.0 X 2.0 X х Investment in bonds X 36.0 X 5 Nov 01, 2021 Fair value adjustment Cash 6 Dec 01, 2021 Investment in bonds ✓ 60.0 Cash 60.0
7 Dec 20, 2021 Investment in bonds 5.9 Cash 5.9 8 Dec 21, 2021 50.0 Investment in equity securities Cash 50.0 9 Dec 23, 2021 x Investment in bonds Fair value adjustment X 10 Dec 23, 2021 Cash 6.2 5.9 Investment in bonds Gain on investment (unrealized, NI) x 0.3 11 Dec 29, 2021 7.0 Cash Dividend revenue 7.0 12 Dec 31, 2021 Interest receivable ✓ 0.3 Interest revenue ✓ 0.3 | 13 Dec 31, 2021 Interest receivable 0.6 Interest revenue 0.6
12 Dec 31, 2021 Interest receivable 0.3 Interest revenue 0.3 13 Dec 31, 2021 Interest receivable 0.6 Interest revenue 0.6 14 Dec 31, 2021 3.7 X Loss on investment (unrealized, NI) Fair value adjustment 3.7 X 15 Jan 07, 2022 9.0 Loss on investment (unrealized, NI) Fair value adjustment 00 9.0 16 Jan 07, 2022 Cash 47.0 3.0 E Fair value adjustment Investment in equity securities 50.0 >
Journal entry worksheet 1 2 3 4 5 6 7 8 16 > Record the entry to adjust to fair value the investment in Kansas Abstractor bonds on the date of sale. Note: Enter debits before credits. Credit Debit 34.0 ► Date General Journal Nov 01, 2021 Cash Loss on investment (unrealized, NI) Investment in bonds 2.0 36.0
9 Record the entry to adjust to fair value the investment in U.S. Treasury bonds on the date of sale. 10 Record the sale of the Treasury bonds for $6.2 million. 11 Record the receipt of cash dividends of $7 million from the Millwork Ventures Company common shares. 12 Record the accrued interest for Holistic Entertainment bonds. 13 Record the accrued interest for Household Plastics bonds. 14 Record the entry to adjust the securities to fair value.
offers financial services through its credit division. From time to
time the company buys and sells securities. The following selected
transactions relate to Amalgamated’s investment activities during
the last quarter of 2021 and the first month of 2022. The only
securities held by Amalgamated at October 1, 2021 were $36 million
of 10% bonds of Kansas Abstractors, Inc., purchased on May 1, 2021
at face value and held in Amalgamated’s trading securities
portfolio. The company’s fiscal year ends on December 31.
Required:
Prepare the appropriate journal entry for each transaction or
event. Use one summary entry on December 31 to adjust the portfolio
of equity investments to fair value. (If no entry is
required for a transaction/event, select "No journal entry
required" in the first account field. Do not round
intermediate calculations. Enter your answers in millions rounded
to 1 decimal place, (i.e., 5,500,000 should be entered as
5.5).)
- Amalgamated General Corporation Is A Consulting Firm That Also Offers Financial Services Through Its Credit Division Fr 1 (35.3 KiB) Viewed 49 times
7 Dec 20, 2021 Investment in bonds 5.9 Cash 5.9 8 Dec 21, 2021 50.0 Investment in equity securities Cash 50.0 9 Dec 23, 2021 x Investment in bonds Fair value adjustment X 10 Dec 23, 2021 Cash 6.2 5.9 Investment in bonds Gain on investment (unrealized, NI) x 0.3 11 Dec 29, 2021 7.0 Cash Dividend revenue 7.0 12 Dec 31, 2021 Interest receivable ✓ 0.3 Interest revenue ✓ 0.3 | 13 Dec 31, 2021 Interest receivable 0.6 Interest revenue 0.6
12 Dec 31, 2021 Interest receivable 0.3 Interest revenue 0.3 13 Dec 31, 2021 Interest receivable 0.6 Interest revenue 0.6 14 Dec 31, 2021 3.7 X Loss on investment (unrealized, NI) Fair value adjustment 3.7 X 15 Jan 07, 2022 9.0 Loss on investment (unrealized, NI) Fair value adjustment 00 9.0 16 Jan 07, 2022 Cash 47.0 3.0 E Fair value adjustment Investment in equity securities 50.0 >
Journal entry worksheet 1 2 3 4 5 6 7 8 16 > Record the entry to adjust to fair value the investment in Kansas Abstractor bonds on the date of sale. Note: Enter debits before credits. Credit Debit 34.0 ► Date General Journal Nov 01, 2021 Cash Loss on investment (unrealized, NI) Investment in bonds 2.0 36.0
9 Record the entry to adjust to fair value the investment in U.S. Treasury bonds on the date of sale. 10 Record the sale of the Treasury bonds for $6.2 million. 11 Record the receipt of cash dividends of $7 million from the Millwork Ventures Company common shares. 12 Record the accrued interest for Holistic Entertainment bonds. 13 Record the accrued interest for Household Plastics bonds. 14 Record the entry to adjust the securities to fair value.