FF&T Corporation is a confectionery wholesaler thatfrequently buys and sells securities to meet various investmentobjectives. The following selected transactions relate toFF&T’s investment activities during the last two months of2021. At November 1, FF&T held $40 million of 20-year, 12%bonds of Convenience, Inc., purchased May 1, 2021, at face value.Management has the positive intent and ability to hold the bondsuntil maturity. FF&T’s fiscal year ends on December 31.
| Nov. | | 1 | | Received semiannual interest of $2.4 million from theConvenience, Inc., bonds. |
| Dec. | | 1 | | Purchased 15% bonds of Facsimile Enterprises at their $32million face value, to be held until they mature in 2024.Semiannual interest is payable May 31 and November 30. |
| | 31 | | Purchased U.S. Treasury bills to be held until they mature intwo months for $9.3 million. |
| | 31 | | Recorded any necessary adjusting entry(s) relating to theinvestments. The fair values of the investments at December 31 were: | | Convenience bonds | $ | 36.7 | million | | Facsimile Enterprises bonds | | 32.9 | million | | U.S. Treasury bills | | 9.3 | million | |
A. Record the interest accrued on Convenience, Inc. bonds. B. Record the interest accrued on FacsimileEnterprises bonds. C. Prepare any journal entry needed to adjust the investmentsfor fair value. |
