ACC 303
HOMEWORK # 1
1. The Janjua Company had the following account balances at 1/1/22:
Common Stock $65,000
Treasury Stock (at cost) 20,000
Paid-in-Capital in Excess of Par 80,500
Investments in AFS Debt Securities 40,500
Accumulated OCI on Debt Securities 600 debit
Retained Earnings 13,400
On that date, the FVA account was at its proper balance.
There were no sales or purchases of Common Stock or Investments during XXXXXXXXXXPrior to any adjusting
journal entries related to the investments, 2022 Net Income was $10,600. No other transactions
affecting Retained Earnings occu
ed. Fair Value of the Investments at 12/31/2022 was $40,000.
Required:
(a) Prepare the 12/31/22 journal entry to adjust the investment to fair value.
(b) Prepare the complete 12/31/22 Equity section of the balance sheet.
2. The following information relates to the HTM debt securities investments of Kiran Company during
2018:
a. Fe
uary 1: The company purchased 10% bonds of Tempe Co. having a par value of $150,000 at 97
plus accrued interest. Interest is payable on April 1 and October 1. Maturity date is 4/1/21
. April 1: Semiannual interest is received and amortization is updated.
c. May 1: 10% bonds of Flagstaff were purchased. The bonds had a par value of $90,000 and were
purchased at 102 plus accrued interest. Interest dates are January 1 and July 1. Maturity date is
7/1/21.
d. July 1: Semiannual interest is received and amortization updated for the Flagstaff bonds.
e. October 1: Semiannual interest is received and amortization updated for the Tempe bonds.
Required:
a) Prepare journal entries for all dates. Present journal entries for all items in
order (a through e). No explanations or supporting computations are
equired. Use straight-line amortization. Do NOT use separate accounts
for discounts and premiums; instead, net them into the Investments
account. When computing amortization, round the monthly amortization
amounts to the nearest cent. However, journal entry amounts can be
ounded to the nearest dollar.
SUBMISSION INFORMATION:
• Submit the assignment in Excel using one page. Include your Name, Date, ACC Course, and
Homework #1 in the upper left corner.
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emailed to the instructor. PLEASE BE SURE YOUR ASSIGNMENT IS ACTUALLY SUBMITTED AND
NOT IN “DRAFT” STATUS. There is a requirement to click a box to acknowledge the submission
is your original work to complete the submission process.