S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2019, for $880,000. At December31, the bonds had a fair value of $873,000, and S&L has the intent and ability to hold the investment until fair valuerecovers. What pretax amounts did S&L include in its 2018 and 2019 net income as a result of this investment?

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A: Amount to be recognised =Market value of ordinary shares -Carrying amount of bonds

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Q: Swifty Company purchased, on January 1, 2020, as an available-for-sale security, $90,000 of the 7%,…

A: SOLUTION- JOURNAL ENTRY  IS USED TO RECORD A BUSINESS TRANSACTION IN THE ACCOUNTING RECORDS OF A…

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A: ANSWER     The business model is to hold the asset until redemption, but sales may be made to invest…

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A: 1) These bonds are classified under available for sale for sale investment as these are held for…

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Q: In the google form, provide the interest income to be recorded on that same day.

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A: When the corporation buys securities with the intention to resell them or not hold them till…

Q: On April 1, 2020, Purefoods Company purchased a P1,000,000 face value 8% bond for P910,000 including…

A: The answer is given below:

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Q: S&L Financial buys and sells securities that it typically classifies as available-for-sale. On…

A:

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A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

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Q: On April 1, 2020, Purefoods Company purchased a P1,000,000 face value 8% bond for P910,000 including…

A: Working note: Computation of carrying amount of bonds investment on April 1, 2020:

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A: The amount by which the proceeds from the sale of investments were greater than the carrying value…

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Q: S&L Financial buys and sells securities that it typically classifies as available-for-sale. On…

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A: Journal:- These are prepared by the companies with debit and credit sides in order to match the…

Q: On April 1, 2020, Purefoods Company purchased a P1,000,000 face value 8% bond for P910,000 including…

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Q: On April 1, 2020, Purefoods Company purchased a P1,000,000 face value 8% bond for P910,000 including…

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A: GAAP - Generally Accepted Accounting Principles refer to a common set of accounting principles,…

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A: The Amortization is defined as the method that reduces the cost value with intangible asset. The two…

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A: As the fair value of the bond is smaller than the purchase price $2000 will be loss in 2018. Also as…

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A: Change  in fair value  is recognized as  unrealized gain or loss

Q: On April 1, 2020, Purefoods Company purchased a P1,000,000 face value 8% bond for P910,000 including…

A:

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A: Gain = Sale value - Ending fair value of bonds

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A: The correct answer for the above mentioned question is given in the following steps for your…