Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain. An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss. Fair value: Fair value is a selling price which is agreed by the buyer and seller. Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains. (a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option. Given information: All the information related to L Company is provided in the question document.

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Answer 1

Question

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

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Answer 2

Question

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

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Answer 3

Question

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

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Answer 4

Question

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

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Answer 5

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

Answer 6

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

Answer 7

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

Answer 8

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

Answer 9

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 17 - Prob. 1Q Ch. 17 - 2. What purpose does the variety in bond features...Ch. 17 - 3. What is the cost of a long-term investment in...Ch. 17 - 4. Identify and explain the three types of...Ch. 17 - 5. When should a debt security be classified as...Ch. 17 - 6. Explain how trading debt securities are...Ch. 17 - 7. At what amount should trading,...Ch. 17 - Prob. 8Q Ch. 17 - 9. If the bonds in Question 8 are classified as...Ch. 17 - Prob. 10Q

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