| 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. | ||||||||
| 15/06/2015 | Gold declared and paid $0.50 per share cash dividend. | |||||||
| 10/12/2015 | Gold declared and paid $0.55 per share cash dividend. | |||||||
| 31/12/2015 | 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. | ||||||||