ts in common stock of Laser Company $1,430,000 Investment in debt securities of FourSquare Company $3,210,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Kingbird’s stock investments does not result in significant influence on the operations of Laser Company. Kingbird’s debt investment is considered held-to-maturity. At December 31, 2021, the shares in Laser Company are valued
ts in common stock of Laser Company $1,430,000 Investment in debt securities of FourSquare Company $3,210,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Kingbird’s stock investments does not result in significant influence on the operations of Laser Company. Kingbird’s debt investment is considered held-to-maturity. At December 31, 2021, the shares in Laser Company are valued
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
Chapter12: Intangibles
Section: Chapter Questions
Problem 18E
Related questions
Question
Kingbird Company has the following investments as of December 31, 2020:
In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Kingbird’s stock investments does not result in significant influence on the operations of Laser Company. Kingbird’s debt investment is considered held-to-maturity. At December 31, 2021, the shares in Laser Company are valued at $1,060,000; the debt investment securities of FourSquare are valued at $2,330,000 and are considered impaired.
| Investments in common stock of Laser Company | $1,430,000 | |
| Investment in debt securities of FourSquare Company | $3,210,000 |
In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Kingbird’s stock investments does not result in significant influence on the operations of Laser Company. Kingbird’s debt investment is considered held-to-maturity. At December 31, 2021, the shares in Laser Company are valued at $1,060,000; the debt investment securities of FourSquare are valued at $2,330,000 and are considered impaired.
Prepare the journal entry to record the impairment of the debt securities at December 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date
|
Account Titles and Explanation
|
Debit
|
Credit
|
| Dec. 31, 2021 |
|
|
|
|
|
|
|
Assuming the fair value of the Laser shares is $1,340,000 and the value of its debt investment is $2,770,000, what entries, if any, should be recorded in 2022? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date
|
Account Titles and Explanation
|
Debit
|
Credit
|
| Dec. 31, 2022 |
|
|
|
|
|
|
|
Assume that the debt investment in FourSquare Company was available-for-sale and the expected credit loss was $980,000. Prepare the journal entry to record this impairment on December 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT