Problem 17-3 Skysong Corp. carries an account in its general ledger called Inves
ID: 2333472 • Letter: P
Question
Problem 17-3 Skysong Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions Feb. 1, 2017 April 1 Sharapova Company common stock, $90 par, 180 shares $35,300 US, government bonds, 10%, due April 1, 2027, interest payable April 1 and October 1, 108 bonds of $1,000 par each 108,000 July 1 McGrath Company 12% bonds, par S49.700, dated March 1, 2017, purchased at 104 plus accrued interest, interest payable annually on March 1, due March 1, 203 53,676 Prepare entries necessary to classify the amounts into proper accounts, assuming that all the securities are classified as available-for-sale. (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.) Account Titles and Explanatiorn Debt Investments Equity Investments Interest Revenue Debit CreditExplanation / Answer
Date
Account Title
Debit
Credit
Feb 1, 17
Investments (Available - for - sale)
16200
Loss on investments
19100
Bank
35300
April 1,2017
Investments (US govt. bonds)
108000
Interest receivable
5400
Bank
108000
Interest income
5400
July 1,2017
Investments (McGrath)
49700
Loss on investments purchase
1988
Interest receivable
1988
Bank
53676
October 1,2017
Bank
5400
Interest income
5400
December 31,2017
Comprehensive income or loss
99
Loss on investments purchase
99
December 31,2017
Investments (available-for-sale)
17100
Comprehensive income or loss
17100
December 31,2017
Investments (US govt bonds)
4600
Comprehensive income or loss
4600
December 31,2017
Comprehensive income or loss
45100
Investments (McGrath)
45100
March 1,2018
Bank
5964
Interest income
5964
Interest receivable
1988
April 1,2018
Bank
5400
Interest income
5400
July 1,2018
Bank
132100
Loss on sale of investments
16800
Investments (US govt bonds)
112600
Interest income
2700
Interest on McGrath investments
49700*12%*(4/12)
Equals 1988
Purchase price
53676
Interest
1988
Par value
49700
Loss on investments purchase
1988
Amortisation
McGrath company
Total loss
1988
Time period
20
Amortisation per annum
99.4
Date
Account Title
Debit
Credit
Feb 1, 17
Investments (Available - for - sale)
16200
Loss on investments
19100
Bank
35300
April 1,2017
Investments (US govt. bonds)
108000
Interest receivable
5400
Bank
108000
Interest income
5400
July 1,2017
Investments (McGrath)
49700
Loss on investments purchase
1988
Interest receivable
1988
Bank
53676
October 1,2017
Bank
5400
Interest income
5400
December 31,2017
Comprehensive income or loss
99
Loss on investments purchase
99
December 31,2017
Investments (available-for-sale)
17100
Comprehensive income or loss
17100
December 31,2017
Investments (US govt bonds)
4600
Comprehensive income or loss
4600
December 31,2017
Comprehensive income or loss
45100
Investments (McGrath)
45100
March 1,2018
Bank
5964
Interest income
5964
Interest receivable
1988
April 1,2018
Bank
5400
Interest income
5400
July 1,2018
Bank
132100
Loss on sale of investments
16800
Investments (US govt bonds)
112600
Interest income
2700