C 4 eztomheducationcomhm tpx 1000 points FFT Corporation is

C 4. ezto.mheducation.com/hm tpx 10.00 points FF&T; Corporation is a confectionery wholesaler that frequently buys and sells securities to meet various investment objectives. The following selected transactions relate to FF&Ts; investment activities during the last two months of 2016 At November 1, FF&T; held S75 million of 30-year, 8% bonds of Convenience, nc, purchased May 1, 2016, at face value. Management has the positive intent and ability to hold the bonds until maturity FF&T;\'s fiscal year ends on December 31 Nov. 1 Received semiannual interest of $3 0 milion from the Convenience, Inc., bonds Dec. 1 Purchased 10% bonds of Facsimile Enterprises at their S72 million face value to be held until they mature in 2026. Semianual interest is payable May 31 and November 30 31 Purchased U.S Treasury bills that mature in two months for $10.7 million 1 Recorded any necessary adjusting entry(s) relating to the investments The fair values of the investments at December 31 were Convenience bonds $71.7 million Facsimile Enterprises bonds 72.9 million US. Treasury bills 10.7 million Required: Prepare the appropriate journal entry for each transaction or event. (If no entry is required for a transaction/event, select \"No journal entry required\" in the first account field. Enter your answers in millions rounded to 1 decimal place (.e. 5,500,000 should be entered as 5.5).) iew transaction list Journal entry worksheet K1 Received semiannual interest of $3.0 million from the Convenience, Inc., bonds. Note: Enter debits before credits. Date Nov 01 Debit Credit Record entry Clear entry Viow general journal

Solution

Solution: Amount is in millions Date General Journal Debit Credit Nov. 1 Cash 3 Investment revenue 3 Date General Journal Debit Credit Dec. 1 Investment in Facsimile Enterprises bonds 72 Cash 72 Date General Journal Debit Credit Dec. 31 Investment in U.S. treasury bills 10.7 Cash 10.7 Date General Journal Debit Credit Dec. 31 Investment revenue receivable—Convenience bonds 1.25 Investment revenue receivable—Facsimile Enterprises bonds 0.6 Investment revenue 1.85 Working Notes: Date General Journal Debit Credit Dec. 31 Investment revenue receivable—Convenience bonds 1.25 Face value of bond x 8% x 2/12 [$75 x 8% x2/12 = 1.25 ] Investment revenue receivable—Facsimile Enterprises bonds 0.6 Face value of bond x 10% x 1/12 [$72 x 10% x 1/12 = 0.60 ] Investment revenue 1.85 Notes: Interest are paid on face value of bonds since convenience bonds were received interest already on nov 1. then till Dec. 31 only 2 month interest will be due but in case of Facsimile enterprises it is bought on Dec. 1 hence only one month interest is due. Please feel free to ask if anything about above solution in comment section of the question.