Interest rate calculation Actual/360

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Instructio

Narrative
Danny, a startup portfolio manager, raised $100 million of committed capital for his new partnership ABC Investments, L.P. He receives the full $100 million contribution on the commencement date of the fund, July 1st, 2020, and begins his investing strategy.
• On July 1st, Danny purchases the following common stocks:
Ticker Shares Price
AMZN 10,000 2,800.00
BRK-B 50,000 178.00
JPM 150,000 94.00
• On July 1st, Danny also received an allocation of the following term loan via primary issuance:
Loan Principal Issue Price Trade Date Settle Date
XYZ Loan 10,000,000 99.00 7/1/20 7/6/20
• On July 6th, Danny sells half of his JPM position at $94.50 per share and does not trade in the portfolio for the remainder of the month.
Note: All common stock trades had a $0.02 commission (not included in the above prices) and settle T+2.
Additional Information
• JPMorgan declared a dividend of $0.90 per share in July, the ex-date is 7/2/2020 and the pay date is 7/31/2020.
• Interest accrues on the closing daily cash balance at a flat rate of 0.60%. It is paid by the broker 2 business days after month end.
• The investor pays a management fee of 1% annually, calculated on the beginning assets, expensed monthly and paid quarterly in advance.
• XYZ Loan Terms:
- Accrual Terms: Actual/360
- Interest Rate: 1 Month Libor plus Spread (9.0%), Libor Floor of 1.0%
- Interest Period: Interest is due on the 1st of every month.
- Interest Determination Date: Calculated 2 Business days prior to the commencement of the Interest Period
• XYZ Loan Prices (Not publicly traded): 7/1/2020 - 99.00, 7/6/2020 - 99.00, 7/31/2020 - 99.50
Instructions
• Using the information above, complete three trial balances (blue tabs) for the portfolio for the below periods:
1) July 1st
2) July 2nd - 6th
3) July 7th - 31st
• For each of the trial balances, account for the period specific income / expense and change in assets / liabilities including the change in mark to market for the current holdings using the end of period closing stock prices.
• On the Month End Trial Balance, accrue the month-to-date interest income using the average daily cash balance for the portfolio.
Accrue the full month's interest on the Month End Trial Balance tab. You do not need to accrue interest on the July 1 or July 6 tabs.
• Calculate the month-to-date percentage return for the portfolio on the Month End Trial Balance.
• Use the Working Tab for your calculations and to provide support for your trial balance entries.

July 1 Trial Balance

ABC Investments, L.P.
Trial Balance
Start Date: 7/1/20
End Date: 7/1/20
Beginning Balance Debit Credit Closing Balance
Assets
Investments Cost - 0 - 0
Investments Unrealized Gain/Loss - 0 - 0
Cash - 0 - 0
Receivables - 0 - 0
Receivables Dividends - 0 - 0
Receivables Interest - 0 - 0
Prepaid Fees Management Fee - 0 - 0
Assets Total - 0 - 0 - 0 - 0
Liabilities
Investments Cost - 0 - 0
Investments Unrealized Gain/Loss - 0 - 0
Cash - 0 - 0
Payables - 0 - 0
Payables Dividends - 0 - 0
Payables Interest - 0 - 0
Liabilities Total - 0 - 0 - 0 - 0
Owners Equity
Contributed Capital - 0 - 0
Owners Equity Total - 0 - 0 - 0 - 0
Revenues
Change in Unrealized Price Gain/Loss - 0 - 0
Long Term Price Gain/Loss - 0 - 0
Short Term Price Gain/Loss - 0 - 0
Dividend Income - 0 - 0
Interest Income - 0 - 0
Revenues Total - 0 - 0 - 0 - 0
Expenses
Commission Expense - 0 - 0
Dividend Expense - 0 - 0
Interest Expense - 0 - 0
Management Fee Expense - 0 - 0
Expenses Total - 0 - 0 - 0 - 0
Total Revenues & Expenses - 0 - 0 - 0 - 0
Total Net Assets - 0 - 0 - 0 - 0
- 0 - 0
OK

Please populate gray boxes.

July 7 trial balance

ABC Investments, L.P.
Trial Balance
Start Date: 7/2/20
End Date: 7/6/20
Beginning Balance Debit Credit Closing Balance
Assets
Investments Cost - 0 - 0
Investments Unrealized Gain/Loss - 0 - 0
Cash - 0 - 0
Receivables - 0 - 0
Receivables Dividends - 0 - 0
Receivables Interest - 0 - 0
Prepaid Fees Management Fee - 0 - 0
Assets Total - 0 - 0 - 0 - 0
Liabilities
Investments Cost - 0 - 0
Investments Unrealized Gain/Loss - 0 - 0
Cash - 0 - 0
Payables - 0 - 0
Payables Dividends - 0 - 0
Payables Interest - 0 - 0
Liabilities Total - 0 - 0 - 0 - 0
Owners Equity
Contributed Capital - 0 - 0
Owners Equity Total - 0 - 0 - 0 - 0
Revenues
Change in Unrealized Price Gain/Loss - 0 - 0
Long Term Price Gain/Loss - 0 - 0
Short Term Price Gain/Loss - 0 - 0
Dividend Income - 0 - 0
Interest Income - 0 - 0
Revenues Total - 0 - 0 - 0 - 0
Expenses
Commission Expense - 0 - 0
Dividend Expense - 0 - 0
Interest Expense - 0 - 0
Management Fee Expense - 0 - 0
Expenses Total - 0 - 0 - 0 - 0
Total Revenues & Expenses - 0 - 0 - 0 - 0
Total Net Assets - 0 - 0 - 0 - 0
- 0 - 0
OK

Month End Trial Balance

ABC Investments, L.P.
Trial Balance
Start Date: 7/7/20
End Date: 7/31/20
Beginning Balance Debit Credit Closing Balance
Assets
Investments Cost - 0 - 0
Investments Unrealized Gain/Loss - 0 - 0
Cash - 0 - 0
Receivables - 0 - 0
Receivables Dividends - 0 - 0
Receivables Interest - 0 - 0
Prepaid Fees Management Fee - 0 - 0
Assets Total - 0 - 0 - 0 - 0
Liabilities
Investments Cost - 0 - 0
Investments Unrealized Gain/Loss - 0 - 0
Cash - 0 - 0
Payables - 0 - 0
Payables Dividends - 0 - 0
Payables Interest - 0 - 0
Liabilities Total - 0 - 0 - 0 - 0
Owners Equity
Contributed Capital - 0 - 0
Owners Equity Total - 0 - 0 - 0 - 0
Revenues
Change in Unrealized Price Gain/Loss - 0 - 0
Long Term Price Gain/Loss - 0 - 0
Short Term Price Gain/Loss - 0 - 0
Dividend Income - 0 - 0
Interest Income - 0 - 0
Revenues Total - 0 - 0 - 0 - 0
Expenses
Commission Expense - 0 - 0
Dividend Expense - 0 - 0
Interest Expense - 0 - 0
Management Fee Expense - 0 - 0
Expenses Total - 0 - 0 - 0 - 0
Total Revenues & Expenses - 0 - 0 - 0 - 0
Total Net Assets - 0 - 0 - 0 - 0
- 0 - 0
OK
MONTHLY RETURN