close solutoin list

Available-for-Sale Securities Tolland Financial began operators in 2020 and invests in securities classified as available-for- sale. During 2020, it entered into the following available-for-sale security transactions: Purchased debt securities of DTR for $500,000 Purchased debt securities of MJO for $968,000 At December 31, 2020, the DTR debt securities were trading at $520,000 and the MJO debt securities are trading for 5950,000. Required: 1. Prepare the necessary adjusting entry to value the available-for-sale securities at fair market value. 2. CONCEPTUAL CONNECTION What is the income statement effect of this adjusting entry?

BuyFind

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881
BuyFind

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881

Solutions

Chapter
Section
Chapter A2, Problem 19E
Textbook Problem

Available-for-Sale Securities

Tolland Financial began operators in 2020 and invests in securities classified as available-for- sale. During 2020, it entered into the following available-for-sale security transactions:

Purchased debt securities of DTR for $500,000 Purchased debt securities of MJO for $968,000

At December 31, 2020, the DTR debt securities were trading at $520,000 and the MJO debt securities are trading for 5950,000.

Required:

1. Prepare the necessary adjusting entry to value the available-for-sale securities at fair market value.

2. CONCEPTUAL CONNECTION What is the income statement effect of this adjusting entry?

Expert Solution

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Solution

*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Chapter A2 Solutions

Cornerstones of Financial Accounting
Show all chapter solutions
Ch. A2 - How does the consolidated balance sheet differ...Ch. A2 - What is the allowance to adjust short-term...Ch. A2 - Why is it necessary to eliminate transactions...Ch. A2 - What is the difference between an asset...Ch. A2 - What is goodwill, and how is it calculated?Ch. A2 - Investments in equity securities are deemed to be...Ch. A2 - Debt investments that management intends to sell...Ch. A2 - Which of the following is a reason businesses...Ch. A2 - Which of the following terms is not used for debt...Ch. A2 - How are held-to-maturity securities values? a....Ch. A2 - The Boss Inc. reported an unrealized gain on its...Ch. A2 - EMK Corp. is holding two bonds to maturity, both...Ch. A2 - Refer to the information for Shackley above. Which...Ch. A2 - Refer to the information for Shackley above....Ch. A2 - A2-10 JFK Inc. buys 30% of the shares outstanding...Ch. A2 - Whopper Corporation owns a 40% interest in BigMac...Ch. A2 - When the market value of a companys...Ch. A2 - What account title will not appear on consolidated...Ch. A2 - Consolidated financial statements are required: a....Ch. A2 - Assume a parent has total assets of $6,000,000 and...Ch. A2 - Goodwill is calculated as the excess of the cost...Ch. A2 - Matching Accounting Methods and Investments...Ch. A2 - Trading Securities Pear Investments began...Ch. A2 - Available-for-Sale Securities Tolland Financial...Ch. A2 - Allowance for Available-for-Sale Securities...Ch. A2 - Adjusting the Allowance to Adjust Trading...Ch. A2 - Investment in Equity Securities 200 shares of...Ch. A2 - Fair Value and Equity Methods Nadal Corporation...Ch. A2 - Fair Value Method On January 1, 2019, Miller Inc....Ch. A2 - On January 1, 2019, Hill Corporation acquired 40%...Ch. A2 - Accounting for Investments in Equity Securities On...Ch. A2 - Investments in Trading Securities Maxwell Company...Ch. A2 - Consolidated Balance Sheet Augusta Inc. acquired...Ch. A2 - Consolidated Income Statement Johnson Inc. is the...Ch. A2 - Goodwill Pindar Corporation acquired all the...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions
List and describe the different types of databases.

Database Systems: Design, Implementation, & Management

Crystal tableware glass that sparkles is sought after by many people as a sign of affluence. This crystal commo...

Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)

What view of a drawing usually shows the most detail?

Precision Machining Technology (MindTap Course List)

Explain the differences between a Gantt chart and a PERT/CPM chart

Systems Analysis and Design (Shelly Cashman Series) (MindTap Course List)

What is the difference between a CSO and a CISO?

Management Of Information Security

What is goodwill? When is it recognized?

College Accounting, Chapters 1-27

What are the three strategic themes of the financial perspective?

Cornerstones of Cost Management (Cornerstones Series)

Owners of corporations have no personal liability for debts of the corporation.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

What does double taxation of corporate income mean? Could income ever be subject to triple taxation? Explain yo...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)