Brief Exercise 17-4 Brief Exercise 17-4 Sheridan Corporation purchased trading i

Question

Brief Exercise 17-4

Brief Exercise 17-4 Sheridan Corporation purchased trading investment bonds for $64,000 at par. At December 31, Sheridan received annual interest of $2,560, and the fair value of the bonds was $61,200 Prepare Sheridan's journal entries for (a) the purchase of the investment, (b) the interest received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Account Titles and Explanation Debit Credit

Explanation / Answer

Dr Cr a Debt investments 64000 Cash 64000 b Cash 2560 Interest Revenue 2560 c Unrealized Holding Loss – Income 2800 Fair Value Adjustment (Trading) 2800

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