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Sunday, November 14, 2010

Valix Finacc vol 1 Problem 12-2

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 12-2


Bonds held as trading


2008
April  1   Trading securities                                                                 2,200,000
                       Cash                                                                                                   2,200,000

Oct.  1   Cash (2,000,000 x 12% x 6/12)                                     120,000
                       Interest income                                                                                                120,000

Dec. 31  Accrued interest receivable                                                    60,000
                       Interest income (2,000,000 x 12% x 3/12)                                                 60,000

        31   Trading securities                                                                   100,000
                     Unrealized gain – TS                                                                                100,000

2009
Jan.  1   Interest income                                                                        60,000
                      Accrued interest receivable                                                                    60,000

April  1   Cash                                                                                      120,000
                       Interest income                                                                                                120,000

Oct.  1   Cash                                                                                      120,000
                       Interest income                                                                                                120,000

Dec. 31   Accrued interest receivable                                       60,000
                       Interest income                                                                                                  60,000

         31   Unrealized loss – TS                                                               340,000
                      Trading securities (2,300,000 – 1,960,000)                                                340,000            

Bonds held to maturity

2008
April   1   Held to maturity securities                                                  2,200,000
                       Cash                                                                                                   2,200,000

Oct.  1   Cash                                                                                      120,000
                       Interest income                                                                                                120,000
                                                                                                      
         
2008
Dec. 31   Accrued interest receivable                                       60,000
                       Interest income                                                                                                  60,000

         31   Interest income (50,000 x 9/12)                                              37,500
                      Held to maturity securities                                                                       37,500

2009
Jan.   1   Interest income                                                                      60,000
                      Accrued interest receivable                                                                    60,000

April  1   Cash                                                                                      120,000
                       Interest income                                                                                                120,000

Oct.  1   Cash                                                                                      120,000
                       Interest income                                                                                                120,000

Dec. 31   Accrued interest receivable                                       60,000
                       Interest income                                                                                                  60,000

         31   Interest income (200,000/4)                                                    50,000
                       Held to maturity securities                                                                      50,000

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