Question - Fleet Inc. is an athletic footware company that began operations on January 1, 2012. The following transaction relate to debt investments acquired by Fleet Inc., which has a fiscal year ending on December 31:
2012
Mar. 1 Purchased $36,000 of Madison Co. 5% 10 - year bonds at face value plus accrued interest of $150. The bonds pay interest semiannually on February 1 and August 1.
Apr. 16 Purchased $45,000 of Westville 4%, 15 - year bonds at face value plus accrued interest of $75. The bonds pay interest semiannually on April 1 and October 1.
Aug. 1 Received semiannual interest on the Madison Co. bonds.
Sept. 1 Sold $12,000 of Madison Co. bonds at 98 plus accrued interest of $50.
Oct. 1 Received semiannual interest on Westville bonds.
Dec 31. Accrued $500 interest on Madison Co. bonds.
Dec 31. Accrued $450 interest on Westville bonds.
2013
Feb. 1 Received semiannual interest on the Madison Co. bonds.
Apr. 1. Received semiannual interest on the Westville bonds.
Instructions -
1) Journalize the entries to record these transactions.
2) If the bond portfolio was classified as available - for - sale, what impact would this have on financial statement disclosure?