Hi, I'm not sure which values to use because I assumed it would be the difference between the two values given for the journal entry but seems like that's not the case. How do I solve this? Valuing Available-for-Sale Securities at Fair ValueOn January 1, Valuation Allowance for Available-for-Sale Investments had a zero balance. On December 31, the cost of the available-for-sale securities was $207,000, and the fair value was $212,660Prepare the adjusting entry to record the unrealized gain or loss on available-for-sale investments on December 31.Dec. 31 Valuation Allowance for Available-for-Sale Investments5,600 | XUnrealized Gain (Loss) on Available-for-Sale Investments5,600 | X

Investment: It refers to the process of using the currently held excess cash to earn profitable…

Answered: Valuing Available-for-Sale Securities…

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

ChapterD: Investments

Section: Chapter Questions

Problem D.11EX: Valuing available-for-sale securities at fair value On January 1. 20Y5. Valuation Allowance for...

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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.
Trading Securities Pear Investments began operations in 2020 and invests in securities classified as trading securities. During 2020, it entered into the following trading security transactions: Purchased 20,000 shares of ABC common stock at $38 per share Purchased 32,000 shares of XYZ common stock at $17 per share At December 31, 2020, ABC common stock was trading at $39.50 per share and XYZ common stock was trading at $16.50 per share. Required: 1. Prepare the necessary adjusting entry to value the trading securities at fair market value. 2. CONCEPTUAL CONNECTION What is the income statement effect of this adjusting entry?
Investments in Equity Securities Manson Incorporated reported investments in equity securities of 60,495 as a current asset on its December 31, 2018, balance sheet. An analysis of Mansons investments on December 31, 2018, reveals the following: During 2019, the following transactions related to Mansons investments occurred: Required: 1. Assuming Manson prepares quarterly financial statements, prepare journal entries to record the preceding information. 2. Show the items of income or loss from investment transactions that Manson reports for each quarter of 2019. 3. Show how Mansons investments are reported on the balance sheet on March 31, 2019; June 30, 2019; September 30, 2019; and December 31, 2019.

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