'Corporate finance Essay\r'

'There are three main thinks companies bribe enthronizations in debt or stock securities. The first reason is if corporations bring in extra cash that they don’t need for immediate purchase of operating assets.\r\nThe s reason is; Companies purchase apparelments to generate earnings from investment income. The third reason companies purchase investments is for strategic reasons. A company can exercise some find out over a customer by owning a significant, but not positive, interest in that company. Or, a company may purchase a non controlling interest in another company in a related industry in which it wishes to install a presence. (Weygandt, Kimmel, & Kieso, 2010).\r\nSometimes corporations will have excess cash for investment reasomns. It may invest in things, incase in the future the miserliness falls then it has money to fall spur on when money is gone, or low. 3. Low-risk, high-liquidity, footling-term securities such(prenominal) as government-issued secu rities are best when investing for short periods of time. 4. Debt securities, from banks and other financial institutions and stock securities from mutual gold and pension funds generate earnings when investing. 5.\r\n6. Stocks of companies in a related industry or in an unrelated industry that the company wishes to enter\r\nQ: E12-2 Foren muckle had the following transactions pertaining to debt investments. Jan. 1 Purchased 50 8%, $1,000 Choate Co. bonds for $50,000\r\ncash plus brokerage fees of $900. Interest is account payable semiannually on July 1 and January 1. July 1 original semiannual interest on Choate Co. bonds. July 1 change 30 Choate Co. bonds for $34,000 less $500 brokerage fees. operating instructions\r\n(a) Journalize the transactions.\r\n(b) Prepare the adjusting entry for the accrual of interest at December 31.\r\nA. Jan. 1\r\nDebt investments $50,900\r\n gold $50,900\r\nJuly 1\r\nCash $2000\r\nInterest rev.$2000\r\nJuly 1\r\nCash $33,500\r\nDebt Investment $3 3,540\r\n view on sale $2,960\r\nDec. 31\r\nInterest receivable $2000\r\nInterest revenue $2000\r\nReferences\r\nWeygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2010). Financial score (7th ed.). Hoboken, NJ: John Wiley & Sons.\r\n'