fleet inc is an athletic footware company that began operations 255994

Fleet Inc. is an athletic footware company that began operations on January 1, 2012. The following transactions relate to debt investments acquired by Fleet Inc., which has a fiscal year ending on December 31:

2012

Mar. 1Purchased $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. 16Purchased $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. 1Received semiannual interest on the Madison Co. bonds.

Sept. 1Sold $12,000 of Madison Co. bonds at 98 plus accrued interest of $50.

Oct. 1Received semiannual interest on Westville bonds.

Dec. 31. Accrued $500 interest on Madison Co. bonds.

31. Accrued $450 interest on Westville bonds.

2013

Feb. 1Received semiannual interest on the Madison Co. bonds.

Apr. 1Received 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?

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