Gen Combo Ll Financial Accounting: Information For Decisions; Connect Ac
9th Edition
ISBN: 9781260260779
Author: Wild
Publisher: MCG
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Chapter C, Problem 7E
Summary Introduction
Concept Introduction:
Investment in available of sale securities is made for a short term period to earn a short term gain. The period of holding of these securities is usually less than one year. These investments are recorded at fair value on the balance sheet date and any gain or loss on revaluation is recorded as unrealized gain or loss on investment.
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On December 31, Lujack Company held the following short-term available-for-sale securities. Lujack had no short-
term investments prior to the current period.
Prepare the December 31 year-end adjusting entry to record the fair value adjustment for these debt securities.
Complete this question by entering your answers in the tabs below.
General
Journal
Fair Value
Adjustment
Computation of fair value adjustment.
Available-for-Sale Securities
Nintendo Company notes
Atlantic bonds
Kellogg Company notes
McDonald's Corporation bonds
Totals
Computation of Fair Value Adjustment
$
Cost
Fair Value
50,100 $ 54,609
18,637
33,908
20,040
36,072
67,635
64,253
$ 173,847 $ 171,407
Fair Value Adjustment
Unrealized
Amount
General Journal
Gain or Loss?
>
On December 31, Lujack Co. held the following short-term available-for-sale securities. Lujack had no short-term investments prior to the current period. Prepare the December 31 year-end adjusting entry to record the fair value adjustment for these debt securities.
On December 31, Lujack Company held the following short-term available-for-sale securities. Lujack had no short-term investments prior to the current period. Prepare the December 31 year-end adjusting entry to record the fair value adjustment for these debt securities. Complete this question by entering your answers in the tabs below. Fair Value AdjustmentGeneral Journal Computation of fair value adjustment. Computation of Fair Value Adjustment Available-for-Sale Securities Cost Fair Value Unrealized Amount Gain or Loss? Nintendo Company notes $74,400 $81,096 Atlantic bonds 29,760 27,677 Kellogg Company notes 53,568 50,354 McDonald's Corporation bonds 100,440 95,418 Totals $258,168 $254,545
Chapter C Solutions
Gen Combo Ll Financial Accounting: Information For Decisions; Connect Ac
Ch. C - Under what two conditions should investments be...Ch. C - Prob. 2DQCh. C - Prob. 3DQCh. C - Identify the three classes of debt investments and...Ch. C - Prob. 5DQCh. C - Prob. 6DQCh. C - Prob. 7DQCh. C - Prob. 8DQCh. C - Prob. 9DQCh. C - Prob. 10DQ
Ch. C - Prob. 11DQCh. C - Prob. 12DQCh. C - Prob. 13DQCh. C - Prob. 14DQCh. C - Which of the following statements a through g are...Ch. C - Prob. 2QSCh. C - Prob. 3QSCh. C - Prob. 4QSCh. C - Prob. 5QSCh. C - Prob. 6QSCh. C - Journ Co. purchased short-term investments in...Ch. C - Prob. 8QSCh. C - Prob. 9QSCh. C - Prob. 10QSCh. C - Prob. 11QSCh. C - Prob. 12QSCh. C - Complete the following descriptions by filling in...Ch. C - Complete the following descriptions by filling in...Ch. C - Prob. 15QSCh. C - Prob. 17QSCh. C - Complete the following descriptions by filling in...Ch. C - Prob. 2ECh. C - Prob. 4ECh. C - Prob. 5ECh. C - Prob. 6ECh. C - Prob. 7ECh. C - Use the following information of Prescrip Co. to...Ch. C - Prob. 9ECh. C - Prob. 10ECh. C - Prob. 12ECh. C - Complete the following descriptions by filling in...Ch. C - Prob. 14ECh. C - Prob. 1PSACh. C - Prob. 3PSACh. C - Prob. 4PSACh. C - Prob. 5PSACh. C - Prob. 6PSACh. C - Prob. 1PSBCh. C - Prob. 3PSBCh. C - Prob. 4PSBCh. C - Prob. 5PSBCh. C - Prob. 6PSBCh. C - Prob. CSPCh. C - Prob. 1GLPCh. C - Prob. 2GLPCh. C - Prob. 1FSACh. C - Prob. 2FSACh. C - Prob. 3FSACh. C - Prob. 2BTN
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- ! Required information [The following information applies to the questions displayed below.] On December 31, Reggit Company held the following short-term investments in its portfolio of available-for-sale debt securities. Reggit had no short-term investments in its prior accounting periods. Available-for-Sale Securities Verrizano Corporation bonds Preble Corporation notes Lucerne Company bonds Prepare the December 31 adjusting entry to report these investments at fair value. General Journal Complete this question by entering your answers in the tabs below. Fair Value Adjustment Computation of fair value adjustment. Cost $ 68,000 49,000 64,000 Verrizano Corporation bonds Preble Corporation notes Lucerne Company bonds Total Fair Value Adjustment Computation - Available for Sale Portfolio Unrealized Amount Cost Fair Value $ 66,640 43,610 61,440 Fair Value $ 68,000 $ 66,640 49,000 43,610 64,000 61,440 $ 181,000 $ 171,690 Unrealized Lossarrow_forward(a) Assuming no Fair Value Adjustment account balance at the beginning of the year, prepare the adjusting entry at the end of the year if Laura Company's available-for-sale debt securities have a fair value $60,000 below cost. (b) Assume the same information as part (a), except that Laura Company has a debit balance in its Fair Value Adjustment account of $10,000 at the beginning of the year. Prepare the adjusting entry at year-end.arrow_forwardDuring the current year, Reed Consulting acquired long-term available-for-sale debt securities on July 1 at a $70,000 cost. At its December 31 year-end, these securities had a fair value of $58,000. This is the first and only time the company purchased such securities. 1. Prepare the July 1 entry to record the purchase of these debt securities. 2. Prepare the year-end adjusting entry related to these securities.arrow_forward
- The following information is available for Tamarisk Corporation's available-for-sale debt securities at December 31, 2020. Security Cost Fair Value X $40,120 $35,400 28,320 37,760 $68,440 $73,160 Prepare the adjusting entry to record the securities at fair value at December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry.) Account Titles and Explanation Debit Creditarrow_forwardDuring the current year, Reed Consulting acquired long-term available-for-sale debt securities on July 1 at a $76,000 cost. At its December 31 year-end, these securities had a fair value of $63,400. This is the first and only time the company purchased such securities. 1. Prepare the July 1 entry to record the purchase of these debt securities. 2. Prepare the year-end adjusting entry related to these securities. View transaction list Journal entry worksheet 1 2 Record purchase of available-for-sale securities. Note: Enter debits before credits. Date July 01 Record entry General Journal Clear entry Debit Credit View general journalarrow_forwardOn February 15, Jewel Company buys bonds of Marcelo Corp. for $201,700. The investment is classified as available-for-sale securities. This is the company’s first and only investment in available-for-sale securities. On December 31, the bonds had a fair value of $203,700. The entry to record the year-end adjustment is:arrow_forward
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