Financial and Managerial Accounting - CengageNow
15th Edition
ISBN: 9781337911979
Author: WARREN
Publisher: CENGAGE L
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Question
Chapter D, Problem 14E
a.
To determine
Journalize the stock investment transactions in the books of Company S
b.
To determine
Discuss the reporting of unrealized gain or loss on available-for-sale investments on the financial statements
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Fair Value Journal Entries, Available-for-Sale Investments
The investments of Steelers Inc. include a single investment: $400,000 of Bengals Inc. 5% bonds purchased at 100 on January 1, 20Y7. These bonds were classified as available-for-sale securities. As of the December 31, 20Y7, balance sheet date, the fair value of the bonds declined to $392,800.
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20Y7 Dec. 31
fill in the blank 4f6f0ef46fe1011_8
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b. How is the unrealized gain or loss for available-for-sale…
Fair Value Journal Entries, Available-for-Sale Investments
The investments of Steelers Inc. include a single investment: $400,000 of Bengals Inc. 5% bonds purchased at 100 on January 1, 20Y7. These bonds were classified as available-for-sale securities. As of the December 31, 20Y7, balance sheet date, the fair value of the bonds declined to $392,800.
a. Journalize the entries to acquire the investment on January 1, 20Y7, and record the adjustment to fair value on December 31, 20Y7. If an amount box does not require an entry, leave it blank.
20Y7 Jan. 1
Investments-Bengals Inc. Bonds
fill in the blank 9997eefc101405a_2
fill in the blank 9997eefc101405a_3
Cash
fill in the blank 9997eefc101405a_5
fill in the blank 9997eefc101405a_6
20Y7 Dec. 31
Unrealized Gain (Loss) on Available-for-Sale Investments
fill in the blank 9997eefc101405a_8
fill in the blank 9997eefc101405a_9
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fill in the blank 9997eefc101405a_11
On January 1, Year 2, Grand Company purchased as held for collection investment P1,000,000 face value of Greek Company’s 8% bonds for P912,400. The bonds were purchased to yield 10% interest. The bonds mature on January 1 Year 7, and pay interest annually on January 1.
What amount should Grand Company report on its December 31, Year 2 statement of financial position for held for collection investment?
Chapter D Solutions
Financial and Managerial Accounting - CengageNow
Ch. D - Prob. 1ECh. D - Prob. 2ECh. D - Starks Products uses the cost method to account...Ch. D - Prob. 4ECh. D - Prob. 5ECh. D - Prob. 6ECh. D - Prob. 7ECh. D - On January 1, 20Y9, Valuation Allowance for...Ch. D - The investments of Charger Inc. include a single...Ch. D - Jets Bancorp Inc. purchased a portfolio of trading...
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