How do question D? c. If the fair value of the portfolio of securities was $340,000 on December 31, 20Y6, what would be the journalentry to adjust the portfolio to fair value? If an amount box does not require an entry, leave it blank. If no entry isrequired, select "No Entry Required" and leave the amount boxes blank.20Y6 Dec. 31 Valuation Allowance for Available-for-Sale InvestmentsUnrealized Gain on Available-for-Sale Investments20Y6 Dec. 31 Unrealized Loss on Available-for-Sale Investments3,000d. If the fair value of the portfolio of securities was $330,000 on December 31, 20Y6, what would be the journalentry to adjust the portfolio to fair value? If an amount box does not require an entry, leave it blank. If no entry isrequired, select "No Entry Required" and leave the amount boxes blank.Valuation Allowance for Available-for-Sale Investments3,0007,000 X7,000 X Fair value adjustment for available-for-sale investmentsM. Jones Inc. purchased the following available-for-sale securities during 20Y5, its first year of operations:Issuing CompanyArden Enterprises Inc.French Broad Industries Inc.Pisgah Construction Inc.Issuing CompanyArden Enterprises Inc.French Broad Industries Inc.The fair value of the various available-for-sale securities on December 31, 20Y5, was as follows:Fair Value,Dec. 31, 20Y5Pisgah Construction Inc.Cost$150,00066,000104,000$320,000$168,00072,00097,00020Y6 Dec. 31 No Entry RequiredNo Entry Required$337,000a. Journalize the adjusting entry for the fair value of the portfolio of securities on December 31, 20Y5. If anamount box does not require an entry, leave it blank. If no entry is required, select "No Entry Required" and leavethe amount boxes blank.20Y5 Dec. 31 Valuation Allowance for Available-for-Sale InvestmentsUnrealized Gain on Available-for-Sale Investments17,00017,000b. If the fair value of the portfolio of securities were the same on December 31, 20Y6, what would be the journalentry to adjust the portfolio to fair value? If an amount box does not require an entry, leave it blank. If no entry isrequired, select "No Entry Required" and leave the amount boxes blank.31

A journal entry is a form of accounting entry that is used to report a business transaction in a…

d. If the fair value of the portfolio of securities was $330,000 on December 31, 20Y6, what would be the journal entry to adjust the portfolio to fair value? If an amount box does not require an entry, leave it blank. If no entry is required, select "No Entry Required" and leave the amount boxes blank. 20Y6 Dec. 31 Unrealized Loss on Available-for-Sale Investments Valuation Allowance for Available-for-Sale Investments 7,000 X 7,000 X

d. If the fair value of the portfolio of securities was $330,000 on December 31, 20Y6, what would be the journal entry to adjust the portfolio to fair value? If an amount box does not require an entry, leave it blank. If no entry is required, select "No Entry Required" and leave the amount boxes blank. 20Y6 Dec. 31 Unrealized Loss on Available-for-Sale Investments Valuation Allowance for Available-for-Sale Investments 7,000 X 7,000 X

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 20E: The investments of Steelers Inc. include a single investment: 33,100 shares of Bengals Inc. common...

See similar textbooks

Similar questions

During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
Transfer between Categories On December 31, 2018, Leslie Company held an investment in bonds of Kaufmann Company which it categorized as being held to maturity. At that time, the 8%, 100,000 face value bonds had a carrying value of 107,023.56 and were being amortized using the effective interest method based on a market rate of 7%. Interest on these bonds is paid annually each December 31. On December 31, 2019, after recording the interest earned, Leslie decided to reclassify the Kaufmann bonds to its available-for-sale category in anticipation of a major restructuring. At that time, the ending quoted market price for the bonds was 105,000. Required: Prepare the journal entries on December 31, 2019, to record the interest earned and the reclassification.
Victoria Company has investments in marketable securities classified as trading and available-for-sale. At the beginning of the year, the aggregate market value of each portfolio exceeded its amortized cost. During the year, Victoria sold some securities from each portfolio. At the end of the year, the aggregate amortized cost of each portfolio exceeded its market value. Victoria also has investments in bonds classified as held-to-maturity, all of which were purchased for face value. During the year, some of these bonds held by Victoria were called prior to their maturity by the bond issuer. Three months before the end of the year, additional similar bonds were purchased for face value plus 2 months accrued interest. Required: 1. Explain how Victoria accounts for: a. sale of securities from each portfolio b. each equity securities portfolio at year-end 2. Explain how Victoria accounts for the disposition prior to their maturity of the long-term bonds called by their issuer. 3. Explain how Victoria reports the purchase of the additional similar bonds at the date of the acquisition.
The investments of Steelers Inc. include a single investment: 33,100 shares of Bengals Inc. common stock purchased on September 12, 2016, for 13 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, 2016, balance sheet date, the share price declined to 11 per share. a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December 31, 2016. b. How is the unrealized gain or loss for available-for-sale investments disclosed on the financial statements?
Journal entries for available-for-sale securities M. Jones Inc. purchased the following available-for-sale securities during 20Y5, its first year of operations: Issuing Company Cost Arden Enterprises Inc. $150,000 French Broad Industries Inc. 66,000 Pisgah Construction Inc. 104,000 Total $320,000 The fair value of the various available-for-sale securities on December 31, 20Y5, was as follows: Fair Value Issuing Company Dec. 31, 20Y5 Arden Enterprises Inc. $170,000 French Broad Industries Inc. 71,500 Pisgah Construction Inc. 96,000 $337,500 a. Journalize the adjusting entry for the fair value of the portfolio of securities on December 31, 20Y5. If no entry is required, select "no entry required" and leave the amount box blank. If an amount box does not require an entry, leave it blank. 20Y5 Dec. 31 fill in the blank fill in the blank fill in the blank fill in the blank b. If the fair value of the portfolio of…
Fair Value Journal Entries, Available-for-Sale Investments The investments of Steelers Inc. include a single investment: $400,000 of Bengals Inc. 5% bonds purchased at 100 on January 1, 20Y7. These bonds were classified as available-for-sale securities. As of the December 31, 20Y7, balance sheet date, the fair value of the bonds declined to $392,800. a. Journalize the entries to acquire the investment on January 1, 20Y7, and record the adjustment to fair value on December 31, 20Y7. If an amount box does not require an entry, leave it blank. 20Y7 Jan. 1 Investments-Bengals Inc. Bonds fill in the blank 4f6f0ef46fe1011_2 fill in the blank 4f6f0ef46fe1011_3 Cash fill in the blank 4f6f0ef46fe1011_5 fill in the blank 4f6f0ef46fe1011_6 20Y7 Dec. 31 fill in the blank 4f6f0ef46fe1011_8 fill in the blank 4f6f0ef46fe1011_9 fill in the blank 4f6f0ef46fe1011_11 fill in the blank 4f6f0ef46fe1011_12 b. How is the unrealized gain or loss for available-for-sale…
At the beginning of the current year, Alexis Company purchase marketable equity securities to be held as “trading” for P5,000,000. The entity also paid transaction cost amounting to P200,000.The securities had a market value of P5,500,000 at year-ended and the transaction cost that would be incurred on the sale is estimated at P100,000. No securities were sold during the current year. Assuming the company has elected irrevocably to measure the investment at FV thru OCI. What amount of unrealized gain or loss on these securities should be reported in the income statement for the current year?