Trading securities: Debt securities which are held with the intention to sell in the short term for profit are called trading securities. Available-for-sale securities: A debt or equity securities which are purchased with the intention of selling it before its maturity, or selling prior to the longest time period in case if security is without its maturity are available-for-sale securities. Fair value: Fair value is a selling price which is agreed by the buyer and seller, it is also the estimate of the potential market price of good, service or asset. 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. (1) Accounting: (a) To determine the classification and accounting for each of investment presented in the question document. Given information: All the information related to I Company is provided in the question document.

Question

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Answer 1

Question

Chapter 17, Problem 4UJ

To determine

Trading securities: Debt securities which are held with the intention to sell in the short term for profit are called trading securities.

Available-for-sale securities: A debt or equity securities which are purchased with the intention of selling it before its maturity, or selling prior to the longest time period in case if security is without its maturity are available-for-sale securities.

Fair value: Fair value is a selling price which is agreed by the buyer and seller, it is also the estimate of the potential market price of good, service or asset.

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.

(1)

Accounting:

(a)

To determine the classification and accounting for each of investment presented in the question document.

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

To determine

(b)

To prepare: The journal entries needed for I Company relating to I Company’s various investments in other companies. Assume 2017 is I Company’s first year of operations.

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

To determine

(2)

Analysis:

The effect on I Company’s 2017 net income (as reported on I’s income statement) of I Company’s investments in other companies.

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

To determine

(3)

Principles:

The different rationales for the different accounting and reporting rules are different for different types of investments in the securities of other companies.

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

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Answer 2

Question

Chapter 17, Problem 4UJ

To determine

Trading securities: Debt securities which are held with the intention to sell in the short term for profit are called trading securities.

Available-for-sale securities: A debt or equity securities which are purchased with the intention of selling it before its maturity, or selling prior to the longest time period in case if security is without its maturity are available-for-sale securities.

Fair value: Fair value is a selling price which is agreed by the buyer and seller, it is also the estimate of the potential market price of good, service or asset.

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.

(1)

Accounting:

(a)

To determine the classification and accounting for each of investment presented in the question document.

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

To determine

(b)

To prepare: The journal entries needed for I Company relating to I Company’s various investments in other companies. Assume 2017 is I Company’s first year of operations.

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

To determine

(2)

Analysis:

The effect on I Company’s 2017 net income (as reported on I’s income statement) of I Company’s investments in other companies.

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

To determine

(3)

Principles:

The different rationales for the different accounting and reporting rules are different for different types of investments in the securities of other companies.

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

Expert Solution & Answer

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Answer 3

Question

Chapter 17, Problem 4UJ

To determine

Trading securities: Debt securities which are held with the intention to sell in the short term for profit are called trading securities.

Available-for-sale securities: A debt or equity securities which are purchased with the intention of selling it before its maturity, or selling prior to the longest time period in case if security is without its maturity are available-for-sale securities.

Fair value: Fair value is a selling price which is agreed by the buyer and seller, it is also the estimate of the potential market price of good, service or asset.

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.

(1)

Accounting:

(a)

To determine the classification and accounting for each of investment presented in the question document.

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

To determine

(b)

To prepare: The journal entries needed for I Company relating to I Company’s various investments in other companies. Assume 2017 is I Company’s first year of operations.

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

To determine

(2)

Analysis:

The effect on I Company’s 2017 net income (as reported on I’s income statement) of I Company’s investments in other companies.

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

To determine

(3)

Principles:

The different rationales for the different accounting and reporting rules are different for different types of investments in the securities of other companies.

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

Expert Solution & Answer

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Answer 4

Question

Chapter 17, Problem 4UJ

To determine

Trading securities: Debt securities which are held with the intention to sell in the short term for profit are called trading securities.

Available-for-sale securities: A debt or equity securities which are purchased with the intention of selling it before its maturity, or selling prior to the longest time period in case if security is without its maturity are available-for-sale securities.

Fair value: Fair value is a selling price which is agreed by the buyer and seller, it is also the estimate of the potential market price of good, service or asset.

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.

(1)

Accounting:

(a)

To determine the classification and accounting for each of investment presented in the question document.

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

To determine

(b)

To prepare: The journal entries needed for I Company relating to I Company’s various investments in other companies. Assume 2017 is I Company’s first year of operations.

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

To determine

(2)

Analysis:

The effect on I Company’s 2017 net income (as reported on I’s income statement) of I Company’s investments in other companies.

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

To determine

(3)

Principles:

The different rationales for the different accounting and reporting rules are different for different types of investments in the securities of other companies.

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

Expert Solution & Answer

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See solution

Answer 5

Chapter 17, Problem 4UJ

To determine

Trading securities: Debt securities which are held with the intention to sell in the short term for profit are called trading securities.

Available-for-sale securities: A debt or equity securities which are purchased with the intention of selling it before its maturity, or selling prior to the longest time period in case if security is without its maturity are available-for-sale securities.

Fair value: Fair value is a selling price which is agreed by the buyer and seller, it is also the estimate of the potential market price of good, service or asset.

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.

(1)

Accounting:

(a)

To determine the classification and accounting for each of investment presented in the question document.

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

To determine

(b)

To prepare: The journal entries needed for I Company relating to I Company’s various investments in other companies. Assume 2017 is I Company’s first year of operations.

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

To determine

(2)

Analysis:

The effect on I Company’s 2017 net income (as reported on I’s income statement) of I Company’s investments in other companies.

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

To determine

(3)

Principles:

The different rationales for the different accounting and reporting rules are different for different types of investments in the securities of other companies.

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

Answer 6

Chapter 17, Problem 4UJ

To determine

Trading securities: Debt securities which are held with the intention to sell in the short term for profit are called trading securities.

Available-for-sale securities: A debt or equity securities which are purchased with the intention of selling it before its maturity, or selling prior to the longest time period in case if security is without its maturity are available-for-sale securities.

Fair value: Fair value is a selling price which is agreed by the buyer and seller, it is also the estimate of the potential market price of good, service or asset.

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.

(1)

Accounting:

(a)

To determine the classification and accounting for each of investment presented in the question document.

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

Answer 7

Chapter 17, Problem 4UJ

To determine

Trading securities: Debt securities which are held with the intention to sell in the short term for profit are called trading securities.

Available-for-sale securities: A debt or equity securities which are purchased with the intention of selling it before its maturity, or selling prior to the longest time period in case if security is without its maturity are available-for-sale securities.

Fair value: Fair value is a selling price which is agreed by the buyer and seller, it is also the estimate of the potential market price of good, service or asset.

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.

(1)

Accounting:

(a)

To determine the classification and accounting for each of investment presented in the question document.

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

Answer 8

To determine

(b)

To prepare: The journal entries needed for I Company relating to I Company’s various investments in other companies. Assume 2017 is I Company’s first year of operations.

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

Answer 9

To determine

(b)

To prepare: The journal entries needed for I Company relating to I Company’s various investments in other companies. Assume 2017 is I Company’s first year of operations.

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

Answer 10

To determine

(2)

Analysis:

The effect on I Company’s 2017 net income (as reported on I’s income statement) of I Company’s investments in other companies.

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

Answer 11

To determine

(2)

Analysis:

The effect on I Company’s 2017 net income (as reported on I’s income statement) of I Company’s investments in other companies.

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

Answer 12

To determine

(3)

Principles:

The different rationales for the different accounting and reporting rules are different for different types of investments in the securities of other companies.

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

Answer 13

To determine

(3)

Principles:

The different rationales for the different accounting and reporting rules are different for different types of investments in the securities of other companies.

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

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

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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(b)

To prepare: The journal entries needed for I Company relating to I Company’s various investments in other companies. Assume 2017 is I Company’s first year of operations.

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

(2)

Analysis:

The effect on I Company’s 2017 net income (as reported on I’s income statement) of I Company’s investments in other companies.

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

(3)

Principles:

The different rationales for the different accounting and reporting rules are different for different types of investments in the securities of other companies.

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

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Chapter 17 Solutions

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(b) To prepare: The journal entries needed for I Company relating to I Company’s various investments in other companies. Assume 2017 is I Company’s first year of operations. Given information: All the information related to I Company is provided in the question document.

(2) Analysis: The effect on I Company’s 2017 net income (as reported on I’s income statement) of I Company’s investments in other companies. Given information: All the information related to I Company is provided in the question document.

(3) Principles: The different rationales for the different accounting and reporting rules are different for different types of investments in the securities of other companies. Given information: All the information related to I Company is provided in the question document.

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Chapter 17 Solutions

(b)

To prepare: The journal entries needed for I Company relating to I Company’s various investments in other companies. Assume 2017 is I Company’s first year of operations.

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

(2)

Analysis:

The effect on I Company’s 2017 net income (as reported on I’s income statement) of I Company’s investments in other companies.

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

(3)

Principles:

The different rationales for the different accounting and reporting rules are different for different types of investments in the securities of other companies.

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