This Tutorial contains Excel File which can be used to solve for any change in values
Complete the following in WileyPLUS:
Brief Exercise 116
Exercise 121
Exercise 122
Exercise 123
Brief Exercise 17-2
Brief Exercise 17-5
Brief Exercise 17-7
Brief Exercise 17-11
Brief Exercise 17-13
Exercise 17-3
Exercise 17-9
Exercise 17-12
Exercise 17-18
Exercise 17-27
Brief Exercise 116
On April 1, 2018, West Company purchased $472,000 of 6.50% bonds for $490,630 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2023.
Prepare the journal entry on April 1, 2018.
The bonds are sold on November 1, 2019 at 103 plus accrued interest. Amortization was recorded when interest was received by the straight-line method. Prepare all entries required to properly record the sale
Exercise 121
Fill in the dollar changes caused in the Investment account and Dividend Revenue or Investment Revenue account by each of the following transactions, assuming Crane Company uses (a) the fair value method and (b) the equity method for accounting for its investments in Hudson Company.
At the beginning of Year 1, Crane bought 25% of Hudson’s common stock at its book value. Total book value of all Hudson’s common stock was $750,000 on this date.
During Year 1, Hudson reported $69,000 of net income and paid $34,500 of dividends.
During Year 2, Hudson reported $29,000 of net income and paid $19,000 of dividends.
During Year 3, Hudson reported a net loss of $9,000 and paid $4,000 of dividends.
Indicate the Year 3 ending balance in the Investment account, and cumulative totals for Years 1, 2, and 3 for dividend revenue and investment revenue.
Exercise 122 (Part Level Submission)
The following information is available for Irwin Company for 2018:
Net Income $117,000
Realized gain on sale of available-for-sale debt securities 11,000
Unrealized holding gain arising during the period on available-for-sale debt securities 34,000
Reclassification adjustment for gains included in net income 7,500
a) Determine other comprehensive income for 2018.
b) Compute comprehensive income for 2018.
Exercise 123
On January 2, 2018, Tylor Company issued a 4-year, $550,000 note at 8% fixed interest, interest payable semiannually. Tylor now wants to change the note to a variable rate note. As a result, on January 2, 2018, Tylor Company enters into an interest rate swap where it agrees to receive 8% fixed and pay LIBOR of 5.7% for the first 6 months on $550,000. At each 6-month period, the variable interest rate will be reset. The variable rate is reset to 6.6% on June 30, 2018.
Brief Exercise 17-2
Blossom Company purchased, on January 1, 2017, as an available-for-sale security, $82,000 of the 11%, 5-year bonds of Chester Corporation for $76,231, which provides an 13% return.
Prepare Blossom’s journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortization, and (c) the year-end fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) The bonds have a year-end fair value of $77,900.
Brief Exercise 17-5
Tamarisk Corporation purchased 360 shares of Sherman Inc. common stock for $10,800 (Tamarisk does not have significant influence). During the year, Sherman paid a cash dividend of $3.50 per share. At year-end, Sherman stock was selling for $32.50 per share.
Prepare Tamarisk’ journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.)
Brief Exercise 17-7
Bonita Corporation purchased for $285,000 a 25% interest in Murphy, Inc. This investment enables Bonita to exert significant influence over Murphy. During the year, Murphy earned net income of $185,000 and paid dividends of $54,000.
Prepare Bonita’s journal entries related to this investment.
Brief Exercise 17-11
Monty Company invests $10,600,000 in 5% fixed rate corporate bonds on January 1, 2017. All the bonds are classified as available-for-sale and are purchased at par. At year-end, market interest rates have declined, and the fair value of the bonds is now $11,253,000. Interest is paid on January 1.
Prepare journal entries for Monty Company to (a) record the transactions related to these bonds in 2017, assuming Monty does not elect the fair option; and (b) record the transactions related to these bonds in 2017, assuming that Monty Company elects the fair value option to account for these bonds. 
Exercise 17-3 (Part Level Submission)
On January 1, 2017, Bramble Company purchased 10% bonds having a maturity value of $340,000, for $367,149.34. The bonds provide the bondholders with a 8% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest receivable January 1 of each year. Bramble Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.
a) Prepare the journal entry at the date of the bond purchase.
b) Prepare a bond amortization schedule
c) Prepare the journal entry to record the interest revenue and the amortization at December 31, 2017.
d) Prepare the journal entry to record the interest revenue and the amortization at December 31, 2018.
Exercise 17-9 (Part Level Submission)
At December 31, 2017, the available-for-sale debt portfolio for Tamarisk, Inc. is as follows. 
On January 20, 2018, Tamarisk, Inc. sold security A for $30,955. The sale proceeds are net of brokerage fees.
Prepare the adjusting entry at December 31, 2017, to report the portfolio at fair value.
Exercise 17-12
The following are two independent situations.
Situation 1
Pronghorn Cosmetics acquired 10% of the 182,000 shares of common stock of Martinez Fashion at a total cost of $12 per share on March 18, 2017. On June 30, Martinez declared and paid $76,700 cash dividend to all stockholders. On December 31, Martinez reported net income of $113,500 for the year. At December 31, the market price of Martinez Fashion was $13 per share.
Situation 2
Stellar, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 28,900 outstanding shares of common stock at a total cost of $9 per share on January 1, 2017. On June 15, Seles declared and paid cash dividends of $35,400. On December 31, Seles reported a net income of $92,300 for the year.
Prepare all necessary journal entries in 2017 for both situations.
Brief Exercise 17-13
Presented below are two independent cases related to available-for-sale debt investments.
Exercise 17-18
Vaughn Corporation has municipal bonds classified as a held-to-maturity at December 31, 2017. These bonds have a par value of $801,000, an amortized cost of $801,000, and a fair value of $729,000. The company believes that impairment accounting is now appropriate for these bonds.
Prepare the journal entry to recognize the impairment.
Exercise 17-27
On August 15, 2016, Riverbed Co. invested idle cash by purchasing a call option on Counting Crows Inc. common shares for $648. The notional value of the call option is 720 shares, and the option price is $72. The option expires on January 31, 2017. The following data are available with respect to the call option.


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