The following investment account was taken from the general ledger of One Dream Investment Company: Debt Investments Fulfilled Dream 6% bonds (2,000,000 face value, due December 31, 2027) Date PR Debit Credit Balance January 2, 2022 VR P1,812,300 P1,812,300 June 30, 2022 CRJ 60,000 1,752,300 Dec. 31, CRJ 60,000 1,692,300 2022 Dec. 31, 2022 195,000 1,497,300 In the course of your examination, you obtained the following information: . Interest checks were received on June 30 and December 31 and were credited to the investment account. • One dream sold P200,000 of its investment on December 31, 2022 for P195,000. • Effective interest rate on this investment, as computed by your audit staff, is 8%. • One Dream included this investment in a portfolio that is held to collect and for sale. The fair value at December 31, 2022 and 2023 is 97.5 and 105, respectively.
The following investment account was taken from the general ledger of One Dream Investment Company: Debt Investments Fulfilled Dream 6% bonds (2,000,000 face value, due December 31, 2027) Date PR Debit Credit Balance January 2, 2022 VR P1,812,300 P1,812,300 June 30, 2022 CRJ 60,000 1,752,300 Dec. 31, CRJ 60,000 1,692,300 2022 Dec. 31, 2022 195,000 1,497,300 In the course of your examination, you obtained the following information: . Interest checks were received on June 30 and December 31 and were credited to the investment account. • One dream sold P200,000 of its investment on December 31, 2022 for P195,000. • Effective interest rate on this investment, as computed by your audit staff, is 8%. • One Dream included this investment in a portfolio that is held to collect and for sale. The fair value at December 31, 2022 and 2023 is 97.5 and 105, respectively.
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 4E
Related questions
Question
Question 1: The entry to correct the interest income for 2022 includes a debit to
the investment account of how much?
Question 2: How much is the amortization for 2023?
Question 3: how much is the gain or loss on sale as of December 31, 2022?
Transcribed Image Text:The following investment account was taken from the general ledger of One Dream Investment Company:
Debt Investments Fulfilled Dream 6% bonds (2,000,000 face value, due December 31, 2027)
Date
PR
Debit
Credit
Balance
January 2,
2022
VR
P1,812,300
P1,812,300
June 30,
2022
CRJ
60,000
1,752,300
Dec. 31,
CRJ
60,000
1,692,300
2022
Dec. 31,
195,000
1,497,300
2022
In the course of your examination, you obtained the following information:
• Interest checks were received on June 30 and December 31 and were credited to the investment account.
• One dream sold P200,000 of its investment on December 31, 2022 for P195,000.
• Effective interest rate on this investment, as computed by your audit staff, is 8%.
• One Dream included this investment in a portfolio that is held to collect and for sale.
The fair value at December 31, 2022 and 2023 is 97.5 and 105, respectively.
Transcribed Image Text:CRJ
60,000
1,692,300
2022
Dec. 31,
2022
195,000
1,497,300
In the course of your examination, you obtained the following information:
. Interest checks were received on June 30 and December 31 and were credited to the investment account.
• One dream sold P200,000 of its investment on December 31, 2022 for P195,000.
• Effective interest rate on this investment, as computed by your audit staff, is 8%.
• One Dream included this investment in a portfolio that is held to collect and for sale.
The fair value at December 31, 2022 and 2023 is 97.5 and 105, respectively.
Question 1: The entry to correct the interest income for 2022 includes a debit to the investment account of how much?
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