The Following Is Information About O'Hara Corporation's, a Public Company

question 28

Essay

The following is information about O'Hara Corporation's, a public company, trading investments. O'Hara has a September 30 year end.
Sep 1: On hand:
$50,000, 5% FMC Co. bond, purchased previously by O'Hara at 101. Interest on the bond is payable semi-annually on January 1 and July 1.
$100,000 3% Government of Canada bond, previously purchased by O'Hara at 98. Interest on the bond is payable semi-annually on March 31, and September 30.
Sep 1: Purchased $40,000 4% Alpha Inc. bond at 99. Interest is payable annually on August 31.
Sep 30: Received interest on Government of Canada bond.
Sep 30: Sold the Government of Canada bond at 97.
Sep 30: Fair value on FMC Co. bond is $52,500 and fair value of Alpha Inc. bond is $38,700.
Instructions
Record the transactions that occurred in September and prepare any adjusting entries required at September 30.

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Definitions:

Utility Function

A mathematical representation that ranks the preferences of an individual consumer for different bundles of goods.

Initial Endowment

The original allocation of resources, including assets and goods, available to an individual or entity at the start of an economic analysis.

Utility Function

A formula that quantifies the happiness or satisfaction a consumer gains from consuming different combinations of goods and services.

Edgeworth Box

A diagram used in microeconomics to show the distribution of resources or goods between two parties and to illustrate potential gains from trade.