Comprehensive Problem 4 Part 1: Selected transactions completed by Equinox Produ

Question

Comprehensive Problem 4
  Part 1:

Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2014, were as follows:

1.  Journalize the selected transactions.

If no entry is required, select "No entry required" from the dropdown and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank

k.  Received $27,500 dividend from Pinkberry Co. investment in (h).

l.  Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of $375. The bonds are classifed as a held-to-maturity long-term investment.

Explanation / Answer

k. Received $27,500 dividend from Pinkberry Co. investment in (h).

Description Debit Credit

Cash Dr 27500

Dividend Income Cr 27500

l. Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of $375. The bonds are classifed as a held-to-maturity long-term investment.

Description Debit Credit

Long Term Invesntmnet Dr 90000

Interest Income Dr 375

Cash Cr 90375

(Bond = 90000+375 = 90375)

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