Fair value journal entries, available-for-sale investments Hurricane Inc. purchased a portfolio of available-for-sale securities in 2016, its first year of operations. The cost and fair value of this portfolio on December 31, 2016, was as follows: On June 12, 2017, Hurricane purchased 1,450 shares of Rogue Wave Inc. at $45 per share plus a $100 brokerage commission. a. Provide the journal entries to record the following: 1. The adjustment of the available-for-sale security portfolio to fair value on December 31, 2016. 2. The June 12, 2017, purchase of Rogue Wave Inc. stock. b. How are unrealized gains and losses treated differently for available-for-sale securities than for trading securities?

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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615
BuyFind

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615

Solutions

Chapter
Section
Chapter 15, Problem 15.21EX
Textbook Problem

Fair value journal entries, available-for-sale investments

Hurricane Inc. purchased a portfolio of available-for-sale securities in 2016, its first year of operations. The cost and fair value of this portfolio on December 31, 2016, was as follows:

Chapter 15, Problem 15.21EX, Fair value journal entries, available-for-sale investments Hurricane Inc. purchased a portfolio of

On June 12, 2017, Hurricane purchased 1,450 shares of Rogue Wave Inc. at $45 per share plus a $100 brokerage commission.

a. Provide the journal entries to record the following:

1. The adjustment of the available-for-sale security portfolio to fair value on December 31, 2016.

2. The June 12, 2017, purchase of Rogue Wave Inc. stock.

b. How are unrealized gains and losses treated differently for available-for-sale securities than for trading securities?

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Chapter 15 Solutions

Accounting (Text Only)
Ch. 15 - Bond investment transactions Journalize the...Ch. 15 - Bond investment transactions Journalize the...Ch. 15 - Stock investment transactions On February 10,...Ch. 15 - Stock investment transactions On September 12,...Ch. 15 - Equity method On January 2, Peyroux Company...Ch. 15 - Equity method On January 2, Yorkshire Company...Ch. 15 - Valuing trading securities at fair value On...Ch. 15 - Valuing trading securities at fair value On...Ch. 15 - Valuing available-for-sale securities at fair...Ch. 15 - Valuing available-for-sale securities at fair...Ch. 15 - Dividend yield On June 30, 2016, Setzer...Ch. 15 - Dividend yield On October 23, 2016, Wilkerson...Ch. 15 - Entries for investment in bonds, interest, and...Ch. 15 - Entries for investments in bonds, interest, and...Ch. 15 - Entries for investment in bonds, interest, and...Ch. 15 - Entries for investment in bonds, interest, and...Ch. 15 - Interest on bond investments On April 1, 2016,...Ch. 15 - Entries for investment in stock, receipt of...Ch. 15 - Entries for investment in stock, receipt of...Ch. 15 - Entries for stock investments, dividends, and sale...Ch. 15 - Entries for stock investments, dividends, and sale...Ch. 15 - Equity method for stock investment At a total cost...Ch. 15 - Equity method for stock investment On January 4,...Ch. 15 - Equity method for stock investment with loss On...Ch. 15 - Equity method for stock investment Hawkeye...Ch. 15 - Missing statement items, trading investments JED...Ch. 15 - Fair value journal entries, trading investments...Ch. 15 - Fair value journal entries, trading investments...Ch. 15 - Fair value journal entries, trading investments...Ch. 15 - Balance sheet presentation, trading investments...Ch. 15 - Missing statement items, available-for-sale...Ch. 15 - Fair value journal entries, available-for-sale...Ch. 15 - Fair value journal entries, available-for-sale...Ch. 15 - Fair value journal entries, available-for-sale...Ch. 15 - Balance sheet presentation of available-for-sale...Ch. 15 - Balance sheet presentation of available -for-sale...Ch. 15 - Dividend yield At the market close on March 28 of...Ch. 15 - Dividend yield The market price for Microsoft...Ch. 15 - Dividend yield eBay Inc. developed a web-based...Ch. 15 - Appendix Comprehensive income On May 12, 2016,...Ch. 15 - Appendix Comprehensive income On December 31,...Ch. 15 - Debt investment transactions, available-for-sale...Ch. 15 - Stock investment transactions, trading securities...Ch. 15 - Stock Investment transaction, equity method and...Ch. 15 - Investment reporting OBrien Industries Inc. is a...Ch. 15 - Debt investment transactions, available-for-sale...Ch. 15 - Stock investment transactions, trading securities...Ch. 15 - Stock investment transactions, equity method and...Ch. 15 - Investment reporting Teasdale Inc. manufactures...Ch. 15 - Selected transactions completed by Equinox...Ch. 15 - Benefits of fair value On July 16, 1998, Wyatt...Ch. 15 - International fair value accounting International...Ch. 15 - Ethics in Action Financial assets include stock...Ch. 15 - Warren Buffett and "look-through" earnings...Ch. 15 - Reporting investments Group Project In groups of...

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