Live Large Inc. had the following transactions involving non-strategic investments during 2020. ...

60.1K

Verified Solution

Question

Accounting

Live Large Inc. had the following transactions involving non-strategic investments during 2020.

2020
Apr. 1 Paid $116,000 to buy a 90-day term deposit, $116,000 principal amount, 5.5%, dated April 1.
12 Purchased 4,600 common shares of Blue Balloon Ltd. at $24.00.
June 9 Purchased 3,400 common shares of Purple Car Corp. at $50.00.
20 Purchased 1,500 common shares of Yellow Tech Ltd. at $17.50.
July 1 Purchased for $83,950 a 7.5%, $81,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 6.9%. Interest is paid semiannually beginning December 31, 2017. Live Large Inc. plans to hold this investment until maturity.
3 Received a cheque for the principal and accrued interest on the term deposit that matured on June 30.
15 Received a $0.95 per share cash dividend on the Blue Balloon Ltd. common shares.
28 Sold 2,300 of the Blue Balloon Ltd. common shares at $27.75.
Sept. 1 Received a $2.70 per share cash dividend on the Purple Car Corp. common shares.
Dec. 15 Received a $1.55 per share cash dividend on the remaining Blue Balloon Ltd. common shares owned.
31 Received the interest on the Space Explore Inc. bond.
31 The fair values of Live Large Inc.s investments on this date were Blue Balloon shares, $26.20; Purple Car Corp. shares, $43.95; Yellow Tech shares, $20.05. Assume the fair value and the carrying value of the Space Explore bond were equal.
2021
Feb. 16 Sold the remaining Blue Balloon shares at $28.00.

Required: 1. Prepare an amortization schedule for the Space Explore bond showing only 2020 and 2021. (Round your intermediate and final answers to the nearest whole dollar amount. Enter all the amounts as positive values. Use 365 days in a year.)

2. Prepare journal entries to record the preceding transactions. (Round your intermediate and final answers to the nearest whole dollar amount. Use 365 days in a year.)

3. Show how Live Large Inc.s investments will appear on its December 31, 2020, balance sheet. (Round your intermediate and final answers to the nearest whole dollar amount.) image

2. Prepare journal entries to record the preceding transactions. (Round your intermediate and final answers to the nearest whole dollar amount. Use 365 days in a year.) View transaction list Journal entry worksheet Record the purchase of 5.5% term deposit as short-term investment. Note: Enter debits before credits. Date General Journal Debit Credit Apr 01, 2020 Record entry Clear entry View general journal

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students