Q1. Quagle Company had the following transactions pertaining to debt investments. 2017 Jan. 1 Purchased 40, 8%, $1,000 Steve Company bonds for $40,000 cash. Interest is payable annually on January 1. Dec. 31 Accrued annual interest on Steve Company bonds. 2018 Jan. 1 Received interest from Steve Company bonds. Jan. 1 Sold 24 Steve Company bonds for $26,000. Journalize the transactions.
Q2. Hungh Company had the following transactions pertaining to short-term investments in equity securities. Jan. 1 Purchased 1,500 shares of Antuni Company stock for $9,500 cash. June 1 Received cash dividends of $.40 per share on Antuni Company stock. Sept. 15 Sold 375 shares of Antuni Company stock for $2,300 less brokerage fees of $100. Dec. 1 Received cash dividends of $.80 per share on Antuni Company stock.
(a) Journalize the transactions.
(b) Indicate the income statement effects of the transactions.
Q3. On January 1, Oetry Corporation purchased a 35% equity in Selig Company for $190,000. At December 31, Selig declared and paid a $50,000 cash dividend and reported net income of $80,000.
Prepare the necessary journal entries for Oetry Corporation.
Q4. Guo Cosmetics acquired 10% of the 200,000 shares of common stock of Chy Fashion at a total cost of $12 per share on March 18, 2017. On June 30, Chy declared and paid a $50,000 dividend. On December 31, Chy reported net income of $110,000 for the year. At December 31, the market price of Chy Fashion was $15 per share. The stock is classified as available-for-sale.
Journalize the transactions.