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AlekseyPX
3 years ago
15

Prepare journal entries to record the following transactions involving the short-term securities investments of Krum Co., all of

which occurred during year 2017. On August 1, paid $78,000 cash to purchase Houtte's 12% debt securities ($78,000 principal), dated July 30, 2017, and maturing January 30, 2018 (categorized as available-for-sale securities). On October 30, received a check from Houtte for 90 days' interest on the debt securities purchased in transaction a. (Use 360 days in a year. Do not round your intermediate calculations.)
Business
1 answer:
VikaD [51]3 years ago
8 0

Answer:

Journal entries are shown below.

Explanation:

According to the scenario, computation of the given data are as follows,

Short-term security investment = $78,000

Debt securities rate = 12%

Interest on debt securities for 90days = $78,000 × ( 12% × 90÷360 )

= $2,340

So, Journal entries are as follows,

(a) Aug.1, 2017       Short-term security investment A/c Dr.    $78,000

                         To, Cash  A/c           $78,000

                             (Being purchase of debt security is recorded)

(b) Oct.30, 2017       Cash A/c Dr.    $2,340

                         To, Interest  A/c           $2,340

                             (Being interest received is recorded)

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You have $12,500 you want to invest for the next 30 years. You are offered an investment plan that will pay you 7 percent per ye
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Answer:

Balance after 30 years = $151,018.50

Explanation:

In order to calculate this, we will calculate the future value on an amount invested, gaining interest over the years of investment, and this is given by:

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Hence the future value is calculated as follows:

1. For the first 10 years at 7% interest:

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FV = 24,589.392 (1 + 0.095)^{20}

FV = 24,589.392 (1.095)^{20}\\FV= 24,589.392 * 6.1416\\FV = 151,018.496

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