I have an accounting questions please help!?

1.Winrow Co. purchased 50, 6% Johnston Company bonds for $50,000 cash plus brokerage fees of $500. Interest is payable semiannually on July 1 and January 1. The entry to record the December 31 interest accrual would include a

A)credit to Interest Revenue for $1,515.

B)debit to Debt Investments for $1,500.

C)debit to Interest Receivable for $1,500.

D)debit to Interest Revenue for $1,500.

2.Jacobs Corporation makes a short-term investment in 150 shares of Starr Company's common stock. The stock is purchased for $50 a share plus brokerage fees of $450. The entry for the purchase is

A)Debt Investments 7,500

Cash 7,500

B)Stock Investments 7,950

Cash 7,950

C)Stock Investments 7,500

Brokerage fee expense 450

Cash 7,950

D)Stock Investments 7,500

Cash 7,500

3. If the cost method is used to account for a long-term investment in common stock, dividends received should be

A)recorded only when 20% or more of the stock is owned.

B)credited to the Stock Investments account.

C)credited to the Dividend Revenue account.

D)debited to the Stock Investments account.

4.At the end of the first year of operations, the total cost of the trading securities portfolio is $244,000. Total fair value is $250,000. The financial statements should show

A)an addition to an asset of $6,000 and a realized gain of $6,000.

B)an addition to an asset of $6,000 in the current assets section and a realized gain of $6,000 in “Other revenues and gains.”

C)an addition to an asset of $6,000 and an unrealized gain of $6,000 in the stockholders' equity section.

D)an addition to an asset of $6,000 in the current assets section and an unrealized gain of $6,000 in “Other revenues and gains.”

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  • Sandy
    Lv 7
    8 years ago
    Favorite Answer

    1.Winrow Co. purchased 50, 6% Johnston Company bonds for $50,000 cash plus brokerage fees of $500. Interest is payable semiannually on July 1 and January 1. The entry to record the December 31 interest accrual would include a

    C) debit to Interest Receivable for $1,500.

    2.Jacobs Corporation makes a short-term investment in 150 shares of Starr Company's common stock. The stock is purchased for $50 a share plus brokerage fees of $450. The entry for the purchase is

    B)Stock Investments 7,950

    Cash 7,950

    3. If the cost method is used to account for a long-term investment in common stock, dividends received should be

    C) credited to the Dividend Revenue account.

    4.At the end of the first year of operations, the total cost of the trading securities portfolio is $244,000. Total fair value is $250,000. The financial statements should show

    D)an addition to an asset of $6,000 in the current assets section and an unrealized gain of $6,000 in “Other revenues and gains.”

  • Anonymous
    4 years ago

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    RE:

    I have an accounting questions please help!?

    1.Winrow Co. purchased 50, 6% Johnston Company bonds for $50,000 cash plus brokerage fees of $500. Interest is payable semiannually on July 1 and January 1. The entry to record the December 31 interest accrual would include a

    A)credit to Interest Revenue for $1,515.

    B)debit to Debt...

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    Assets = Liabilities + Stockholders' Equity Stockholders' Equity = Contributed Capital + Retained Earnings Therefore, by substitution: Assets = Liabilities + Contributed Capital + Retained Earnings If we subtract Liabilities and Retained Earnings from each side, we get: Assets - Liabilities - Retained Earnings = Contributed Capital, or, by symmetry Contributed Capital = Assets - Liabilities - Retained Earnings, or A Once you set the equations up, it's just basic algebra. I'm guessing that the fact that it's accounting and it's new to you is scaring you a bit.

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