Jamona Corporation

Ada M. Tickle Week 3 ACC/545 Jamona Corporation Scenario 1 Journal Entries Dates AccountsDebitCredit 1 Jan 2006Available for sale securities322,744. 44 Cash322,744. 44 31 Dec 2006Cash36,000 Available for sale securities3,725. 56 Interest Revenue ($3222. 744. 44 X . 10)32,274. 44 31 Dec 2006 Securities Fair Value Adjustment (available for sale)1,481. 12 Unrealized Holding Gain or Loss Equity (320,500. 00 – 319,018. 88)1,481. 12 31 Dec 2007Unrealized Holding Gain or Loss- Equity7,401. 89

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Securities Fair Value Adjustment (Available for Sale)7,401. 89 Note Disclosures Unrealized AmortizedHolding Gain Cost Fair Value (loss) Available for sale bonds$314,920. 77$309,000. 00`$(5,920. 77) Previous securities fair value adjustment Debit 1,481. 12 Securities fair value adjustment Credit $(7,401. 89) Scenario 2 Jamona Corporation Computations of Inventory for Product BAP Under FIFO Inventory Method Dates UnitsUnit CostTotal Cost March 26,2007600$12. 00$7,200

February 16, 200780011. 008,800 January 25, 2007 Portion20010. 002,000 March 31, 2007 Inventory1,600$18,000 Scenario 3 Journal Entries AccountsDebitCredit Land350,000 Building1,050,000 Machinery and Equipment700,000 Common Stock (12,500 X $100)1,250,000 Paid in Capital in Excess of Par ($2,100,000 – $1,250,000850,000 The cost of the property, plant and equipment is $2,100,000 ($12,500 X $168). This cost is allocated based on appraisal values commutated below: Land$400,000X $2,100,000= $350,000 $2,400,000 Building$1,200,000X $2,100,000= $1,050,000 $2,400,000

Machinery & Equipment$800,000X $2,100,000= $700,000 $2,400,000 Journal Entries AccountsDebitCredit Buildings (105,000 + 161,000)266,000 Machinery and Equipment135,000 Land Improvements122,000 Land18,000 Cash541,000 Journal Entries AccountsDebitCredit Machinery and Equipment265,300 Cash (10,500+254,800 which is 98% of 260,000) 265,300 Scenario 4 This is a capital lease to Jamona Corporation since the lease term 5 years is greater than 75% of the economic life 6 years of the leased asset. The lease term is 83 1/3% (5/6) of the assets economic life.

Computation of present value of minimum lease payments: 8,668 X 4. 16986 = $36,144 The present value of an annuity due of 1 of 5 periods at 10% Journal Entries Leased Machine Under Capital Dates AccountsDebitCredit 1 Jan 2007Leases36,144 Lease Liability36,144 Lease Liability8,668 Cash8,668 31 Dec 2007Depreciation Expense7,229 Accumulated Depreciation Capital Leases (36,144 / 5 = 7,229) 7,229 31 Dec 2007Interest Expense2,748 Interest Payable (36,144 – 8,668) X 0. 10 = 2,7482,748 1 Jan 2008Lease Liability5,920 Interest Payable2,748 Cash8,668

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