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Write a 350- to 400 word paper in which you respond to the following Discussion Question from the text:
· Ch. 17 Problems: P17-7
P17-7 (Available-for-Sale and Held-to-Maturity Debt Securities Entries) The following information relates to the debt securities investments of Wildcat Company.
· 1.On February 1, the company purchased 10% bonds of Gibbons Co. having a par value of $300,000 at 100 plus accrued interest. Interest is payable April 1 and October 1.
· 2.On April 1, semiannual interest is received.
· 3.On July 1, 9% bonds of Sampson, Inc. were purchased. These bonds with a par value of $200,000 were purchased at 100 plus accrued interest. Interest dates are June 1 and December 1.
· 4.On September 1, bonds with a par value of $60,000, purchased on February 1, are sold at 99 plus accrued interest.
· 5.On October 1, semiannual interest is received.
· 6.On December 1, semiannual interest is received.
· 7.On December 31, the fair value of the bonds purchased February 1 and July 1 are 95 and 93, respectively.
Instructions
· (a)Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale securities.
· (b)If Wildcat classified these as held-to-maturity investments, explain how the journal entries would differ from those in part (a).
Write a 350- to 400-word paper in which you respond to the following Discussion Question from the text:
· Ch. 20 Problems: P20-1
P20-1 (2-Year Worksheet) On January 1, 2014, Harrington Company has the following defined benefit pension plan balances.
Projected benefit obligation | $4,500,000 |
Fair value of plan assets | 4,200,000 |
The interest (settlement) rate applicable to the plan is 10%. On January 1, 2015, the company amends its pension agreement so that prior service costs of $500,000 are created. Other data related to the pension plan are as follows.
| 2014 | 2015 |
Service cost | $150,000 | $180,000 |
Prior service cost amortization | –0– | 90,000 |
Contributions (funding) to the plan | 240,000 | 285,000 |
Benefits paid | 200,000 | 280,000 |
Actual return on plan assets | 252,000 | 260,000 |
Expected rate of return on assets | 6% | 8% |
Instructions
· (a)Prepare a pension worksheet for the pension plan for 2014 and 2015.
· (b)For 2015, prepare the journal entry to record pension-related amounts.
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