50.1K

Verified Solution

Link Copied!

$$

Question$-1,,,,,,,6-$Marks$$

Prepare$-$entries to record the following non$-$strategic investment$-$transactions of Wiki$-$Garden$-$

Tool$-$Inc. Assume each bond$-$acquired is purchased with the intention to actively trade. I

$2017$

Feb. $1$ Paid $$120\mathrm{.}000,$ plus $$200$ in transaction fees to purchase a $$124\mathrm{.}000$ four$-$year, $3\%$ bond payable of Capital Inc. dated Feb. $1.$ Interest is paid semiannually beginning August $1.$

Mar. $29$ Bought $100,000$ common shares of Regina Inc. for a total of $$85,600,$ plus paid an extra $$500$ for transaction fees.

May $7$ Regina Inc.$\text{'}$s board of directors declared a total dividend of $$525,000$ regarding the total $3,500,000$ shares issued and outstanding. The date of record is May $30,$ payable June $15.$

June $1$ Paid $$139,000$ including $$500$ in transaction fees to purchase a fiveyear, $6\%,$$$136,000$ bond payable of Yates Corporation. Interest is paid annually each May $30.$

Aug. $1$ Received a cheque from Capital Inc. regarding semiannual interest.

$1$ Sold the Capital Inc. bond at $98.$

$17$ Purchased $75,000$ Tech Inc. common shares at $$6\mathrm{.}00$ plus $$400$ in transaction fees.

Dec. $1$ Sold $75,000$ of the Regina Inc. shares at $$0\mathrm{.}95$ and incurred $$250$ in transaction fees.

$31$ Accrued interest on the Yates bond. Fair values of the equity securities on this date were Regina, $$0\mathrm{.}95$: Tech Inc., $$5\mathrm{.}50.$ Assume that the carrying value of the Yates bond was equal to its fair value.

$2018$

May $30$ Received a cheque from Yates Corporation regarding annual interest.

Answer & Explanation Solved by verified expert

See Answer