D1.Account LED Corporation owns $1,700,000 of Branch Pharmaceuticals bonds and classifies its investment as securities held to maturity. Themarket price of Branch's bonds fell by $697,000, due to concerns about one of the company's principal drugs. The concerns werejustified when the FDA banned the drug. LED views $320,000 of the $697,000 loss as related to credit losses, and the other $377,000as noncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers.What journal entries should LED record to account for any credit or noncredit losses in the current period? How should the declineaffect net income and comprehensive income?Complete this question by entering your answers in the tabs below.GeneralJournalEffectHow should the decline affect net income and comprehensive income? (Negative amounts should be entered with minus sign.)EffectNet incomeOther comprehensive incomeNet effect on comprehensive incomeGeneral JournalEffect > LED Corporation owns $1,700,000 of Branch Pharmaceuticals bonds and classifies its investment as securities held to maturity. Themarket price of Branch's bonds fell by $697,000, due to concerns about one of the company's principal drugs. The concerns werejustified when the FDA banned the drug. LED views $320,000 of the $697,000 loss as related to credit losses, and the other $377,000as noncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers.What journal entries should LED record to account for any credit or noncredit losses in the current period? How should the declineaffect net income and comprehensive income?Complete this question by entering your answers in the tabs below.GeneralJournalEffectWhat journal entries should LED record to account for any credit or noncredit losses in the current period? (If no entry is required for atransaction/event, select "No journal entry required" in the first account field.)View transaction listJournal entry worksheet1Record the entry for credit or noncredit losses in the current period.Note: Enter debits before credits.Transaction.General JournalDebitCredit

Available for sale securities: These are the securities which are not intended to be sold in the…

General Journal Effect How should the decline affect net income and comprehensive income? (Negative amounts should be entered with minus sign.) Net income Other comprehensive income Net effect on comprehensive income Effect < General Journal Effect >

General Journal Effect How should the decline affect net income and comprehensive income? (Negative amounts should be entered with minus sign.) Net income Other comprehensive income Net effect on comprehensive income Effect < General Journal Effect >

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 10RE: On September 30, Franz Corporation notices a decline in value of its investment in held-to-maturity...

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LED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securities held-to-maturity. The market price of Branch’s bonds fell by $450,000 due to concerns about one of the company’s principal drugs. The concerns were justified when the FDA banned the drug. LED views $200,000 of the $450,000 loss as related to credit losses, and the other $250,000 as noncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers. What journal entries should LED record to account for any credit or noncredit losses in the current period? How should the decline affect net income and comprehensive income? General Journal What journal entries should LED record to account for any credit or noncredit losses in the current period? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No Transaction General Journal Debit…
LED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securities held to maturity. The market price of Branch’s bonds fell by $450,000, due to concerns about one of the company’s principal drugs. The concerns were justified when the FDA banned the drug. LED views $200,000 of the $450,000 loss as related to credit losses, and the other $250,000 as noncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers. What journal entries should LED record to account for any credit or noncredit losses in the current period? How should the decline affect net income and comprehensive income?
LED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securities available-for-sale. The market price of Branch’s bonds fell by $450,000 due to concerns about one of the company’s principal drugs. The concerns were justified when the FDA banned the drug. $100,000 of that decline in value already had been included in OCI as a temporary unrealized loss in a prior period. LED views $200,000 of the $450,000 loss as related to credit losses, and the other $250,000 as noncredit losses. LED does not plan to sell the investment and does not think it is more likely than not that it will have to sell the investment before fair value recovers. What journal entries should LED record to account for the decline in market value in the current period? How should the decline affect net income and comprehensive income? What journal entries should LED record to account for the decline in market value in the current period?Note: If no entry is required for…
LED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securities available-for-sale. The market price of Branch’s bonds fell by $450,000 due to concerns about one of the company’s principal drugs. The concerns were justified when the FDA banned the drug. $100,000 of that decline in value already had been included in OCI as a temporary unrealized loss in a prior period. LED views $200,000 of the $450,000 loss as related to credit losses, and the other $250,000 as noncredit losses. LED does not plan to sell the investment and does not think it is more likely than not that it will have to sell the investment before fair value recovers. What journal entries should LED record to account for the decline in market value in the current period? How should the decline affect net income and comprehensive income? General Journal What journal entries should LED record to account for the decline in market value in the current period?Note: If no…
LED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securities available-for-sale. The market price of Branch’s bonds fell by $456,000 due to concerns about one of the company’s principal drugs. The concerns were justified when the FDA banned the drug. $102,000 of that decline in value already had been included in OCI as a temporary unrealized loss in a prior period. LED views $202,000 of the $456,000 loss as related to credit losses, and the other $254,000 as noncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers. What journal entries should LED record to account for any credit or noncredit losses in the current period? How should the decline affect net income and comprehensive income?
LED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securities available-for-sale. The market price of LED’s investment in Branch’s bonds fell by $450,000, due to concerns about one of the company’s principal drugs. The concerns were justified when the FDA banned the drug. $100,000 of that decline in value already had been included in OCI as a temporary unrealized loss in a prior period. LED views $200,000 of the $450,000 loss as related to credit losses, and the other $250,000 as noncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers. What journal entries should LED record to account for the decline in market value in the current period? How should the decline affect net income and comprehensive income?
LED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securitiesavailable-for-sale. The market price of Branch’s bonds fell by $450,000, due to concerns about one of the company’sprincipal drugs. The concerns were justified when the FDA banned the drug. $100,000 of that decline in value alreadyhad been included in OCI as a temporary unrealized loss in a prior period. LED views $200,000 of the $450,000 lossas related to credit losses, and the other $250,000 as noncredit losses. LED thinks it is more likely than not that itwill have to sell the investment before fair value recovers. What journal entries should LED record to account for thedecline in market value in the current period? How should the decline affect net income and comprehensive income?
LED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securitiesavailable-for-sale. The market price of Branch’s bonds fell by $450,000, due to concerns about one of the company’s principal drugs. The concerns were justified when the FDA banned the drug. $100,000 of that decline invalue already had been included in OCI as a temporary unrealized loss in a prior period. LED views $200,000of the $450,000 loss as related to credit losses, and the other $250,000 as noncredit losses. LED does not plan tosell the investment and does not think it is more likely than not that it will have to sell the investment before fairvalue recovers. What journal entries should LED record to account for the decline in market value in the currentperiod? How should the decline affect net income and comprehensive income?
ABC Company is in financial difficulties and agreed to issue 20,000 of its P20 par value shares in settlement of its loan from a bank of P1,000,000. On this date, the accrued interest not yet paid by ABC Company amounted to P120,000. The fair market value of the shares on this date is P40 per share while the fair market value of the liability is P1,200,000. According to our standards, what amount of gain or loss from extinguishment of debt shall be recognized from this equity swap?
Bloom Corporation purchased $1,750,000 of Taylor Company 5% bonds, at their face amount, with neither the intent nor the ability to hold the bonds until they matured in 2028, so Bloom classifies its investment as AFS. Unfortunately, a combination of problems at Taylor Company and in the debt securities market caused the fair value of the Taylor investment to decline to $1,200,000 during 2024. The following are the two alternative scenarios that should be analyzed independent of each other. Bloom now believes it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $550,000 decline in fair value, Bloom attributes $325,000 to credit losses, and $225,000 to noncredit losses. Bloom does not plan to sell the Taylor bonds prior to maturity, and does not believe it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $550,000 decline…
Bloom Corporation purchased $1,850,000 of Taylor Company 5% bonds, at their face amount, with the intent and ability to hold the bonds until they matured in 2025, so Bloom classifies its investment as HTM. Unfortunately, a combination of problems at Taylor Company and in the debt securities market caused the fair value of the Taylor investment to decline to $1,280,000 during 2021. The following are the two alternative scenarios that should be analyzed independent of each other. Bloom now believes it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $570,000 decline in fair value, Bloom attributes $335,000 to credit losses, and $235,000 to noncredit losses. Bloom does not plan to sell the Taylor bonds prior to maturity, and does not believe it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $570,000 decline in fair…
LED Corporation owns 100,000 shares of Branch Pharmaceuticals common stock and classifies its investment as securities available-for-sale. The market price of LED’s investment in Branch’s stock fell more than 30%, by $4.50 per share, due to concerns about one of the company’s principal drugs. The concerns were justified when the FDA banned the drug. $1.00 per share of that decline in value already had been included in OCI as a temporary unrealized loss in a prior period. What journal entries should LED record to account for the decline in market value in the current period? How should the decline affect net income and comprehensive income?