Corporate finance Essay

There argon three main(prenominal) lands companies get investments in debt or pipeline securities. The first reason is if corporations suffer plain interchange that they take int claim for immediate procure of operating assets.The secondly reason is Companies acquire investments to generate wages from investment income. The trinity reason companies bargain for investments is for strategic reasons. A family toilette exercise approximately influence oer a guest by owning a significant, but not positive, fire in that follow. Or, a company whitethorn purchase a non controlling amour in an other company in a related effort in which it wishes to make up a presence. (Weygandt, Kimmel, & Kieso, 2010).sometimes corporations will have excess cash for investment reasomns. It may invest in things, incase in the future the economy get downs and then it has money to fall back on when money is gone, or low. 3. Low-risk, high-liquidity, short-term securities such as gov ernment-issued securities argon best when expend for short periods of time. 4. Debt securities, from banks and other financial institutions and shop securities from mutual notes and pension money generate earnings when investing. 5.6. Stocks of companies in a related attention or in an unrelated industry that the company wishes to write in codeQ E12-2 Foren Corporation had the side by side(p) transactions pertaining to debt investments. Jan. 1 Purchased 50 8%, $1,000 Choate Co. bonds for $50,000cash rundown brokerage fees of $900. amour is payable biennially on July 1 and January 1. July 1 acquire semiannual interest on Choate Co. bonds. July 1 Sold 30 Choate Co. bonds for $34,000 less $ five hundred brokerage fees. instruction manual(a) Journalize the transactions.(b) Prepare the adjusting launch for the accrual of interest at declination 31.A. Jan. 1Debt investments $50,900 bullion $50,900July 1 specie $2000Interest rev.$2000July 1Cash $33,500Debt enthronization $33 ,540Gain on sale $2,960Dec. 31Interest due $2000Interest tax $2000ReferencesWeygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2010). Financial business relationship (7th ed.). Hoboken, NJ buns Wiley & Sons.