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Part 3: Free Response – Stockholder’s Equity (15 Points) On January 1, 2023, Boston Corporation had the following stockholder’s equity accounts. The common stock was originally issued for $8 per share years ago. Common stock, $3 par, 90,000 shares issued and outstanding $270,000 Additional paid-in capital – Common stock $530,000 Retained earnings $340,000   During 2023, the Company had the following transactions related to its common stock: January 20: Paid a cash dividend that was declared in the prior year of $37,000. February 15: Repurchased 6,000 shares of treasury stock at $12 per share. August 5: 2,300 shares of treasury stock were reissued at $10 per share. September 26: 800 shares of treasury stock were retired. December 17: 10% stock dividend declared and distributed on outstanding stock when the market price per share was $14.   Assume the Company reported no net income during the current year. Important Note regarding Grading: If you would like the opportunity to receive partial credit at the instructor’s discretion (strongly recommended), please email me at cindy.dosch@warrington.ufl.edu a picture or a scan of your work within 15 minutes of submitting your exam. Be sure to clearly label your work. The work must agree to the final answer originally submitted within Canvas to be eligible for partial credit. Required: (15 Points) Record your final answers to the required items in the table immediately below. If required, round percentages to the second decimal (e.g. 5.75%) and final answers to the nearest whole dollar.   Item as of December 31, 2023 Your Answer (a) Common Stock account balance $ [answer1] (b) Additional Paid-In Capital – Common Stock account balance $ [answer2] (c) Retained Earnings account balance $ [answer3] (d) Treasury Stock account balance $ [answer4] (e) Number of shares outstanding [answer5] shares

Part 2: Free Response – Troubled-Debt Restructuring (20 Points) On December 31, 2023, E. Money Bank (“the Bank”) enters into a debt restructuring agreement with Ronnie Spector Company (“the Company”), which is experiencing financial difficulties. The Company currently owes $7,000,000 plus $90,000 of accrued interest. The note was originally issued at par with a stated rate of 8% with interest payable annually on December 31. The present market rate for a loan of this nature is 12%. The Bank agrees to restructure the note with the following modifications: Reducing the principal by $400,000 and forgiving all of the accrued interest. Extending the maturity date from December 31, 2023 to December 31, 2025. Reducing the stated interest rate from 8% to 6%, payable annually on December 31. Required: Record any required journal entries on December 31, 2023; December 31, 2024; and December 31, 2025 for BOTH Ronnie Spector Company and E. Money Bank. Record your final entries in the provided spaces beginning on the next page. If no journal entry is required, write “no journal entry is required” – DO NOT LEAVE BLANK. If required, round percentages to the second decimal (e.g. 5.75%) and final answers to the nearest whole dollar.

Originally Classified as Held-to-Maturity December 31, 2024 Entry related to Fair Value: Account Debit Credit [account1] [debit1] [credit1] [account2] [debit2] [credit2] [account3] [debit3] [credit3] [account4] [debit4] [credit4] [account5] [debit5] [credit5] [account6] [debit6] [credit6]  

Jagger Company (“the Company”) owned 32,000 shares of Bowie Corporation. The shares were purchased in 2022 for $512,000 and are carried on the Company’s books at historical cost. On January 20, 2023, the Company declared a property dividend that consisted of one share of Bowie Corporation for every ten shares held by the Company’s shareholders. On the date of declaration, each share of Bowie Corporation was trading for $23 per share and the Company had 230,000 shares of its own stock outstanding. What is the net impact on total stockholders’ equity on the date of declaration?

Section I: Multiple-Choice (42 Points – 3 Points Each) Choose the one alternative that best completes the statement or answers the question.

(b) (4 Points) For each of the following independent situations, prepare the journal entry that the Company would have instead recorded on December 31, 2024 (related only to the fair value of the investment) if the investment had originally been classified as follows rather than as available-for-sale. If no journal entry is required in any of the situations, write “no journal entry is required” – DO NOT LEAVE BLANK.

March 1, 2026: Account Debit Credit [account1] [debit1] [credit1] [account2] [debit2] [credit2] [account3] [debit3] [credit3] [account4] [debit4] [credit4] [account5] [debit5] [credit5] [account6] [debit6] [credit6] [account7] [debit7] [credit7] [account8] [debit8] [credit8] [account9] [debit9] [credit9] [account10] [debit10] [credit10] Note: Disregard the fact that this question is labeled as having “0 points” – this question does have points associated and you should answer this question. This question and the previous question will be graded together for a combined total of 18 points.

Question 1. On October 1, 2025, the Company issued $400,000 of 7%, 5-year bonds. The market rate at the time of issue was 9%. The bonds pay interest semiannually on April 1 and October 1 each year. The Company uses the effective-interest method to amortize any discount or premium. On March 1, 2026, the Company redeems the bonds at 102 plus accrued interest. Required: (a) (18 Points) Record the journal entries for the Company for each of the requested dates below. If required to round, round final answers to the nearest whole dollar. Assume that the Company prepares annual adjusting entries on December 31 each year. If no journal entry is required, write “no journal entry is required” – DO NOT LEAVE BLANK.

How much gain (loss), if any, should the Company report on its 2026 income statement related to the March 28 transaction? If none, answer “0” below.

The following information is related to two independent fact patterns of Elvis, Inc. (“the Company”):