Give me answer within 45 min plz I will give positive rating immediately.... Wang Corporation purchased$280,000 of Hales Inc. 7% bonds atpar in 2020 with the intent and abilityto hold the bonds until the bondsmature in 2025, so Wang classifies itsinvestment as held-to-maturity.Unfortunately, a combination ofproblems at Hales and in the debtmarket caused the fair value of theHales investment to decline to$231,000 during 2021. Wang appliesthe CECL model to account for itsinvestment and calculates that, of the$49,000 drop in fair value, $17,000 ofit relates to credit losses for amountsnot expected to be collected, and the$32,000 remainder relates tononcredit losses. Wang's accountingfor this impairment will reducebefore-tax net income for 2021 by: OOOO$17,000.$49,000.$32,000.$0.

Current investments are the investments held for a short period of time that is., for the period of…

$231,000 during 2021. Wang applies the CECL model to account for its investment and calculates that, of the $49,000 drop in fair value, $17,000 of it relates to credit losses for amounts not expected to be collected, and the $32,000 remainder relates to noncredit losses. Wang's accounting for this impairment will reduce before-tax net income for 2021 by:

$231,000 during 2021. Wang applies the CECL model to account for its investment and calculates that, of the $49,000 drop in fair value, $17,000 of it relates to credit losses for amounts not expected to be collected, and the $32,000 remainder relates to noncredit losses. Wang's accounting for this impairment will reduce before-tax net income for 2021 by:

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 7MCQ

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Wang Corporation purchased $290,000 of Hales Incorporated bonds at par in 2023 with the intent and ability to hold the bonds until the bonds mature in 2028, so Wang classifies its investment as held-to-maturity. Unfortunately, a combination of problems at Hales and in the debt market caused the fair value of the Hales investment to decline to $247,000 during 2024. Wang applies the CECL model to account for its investment and calculates that, of the $43,000 drop in fair value, $10,000 of it relates to credit losses for amounts not expected to be collected, and the $33,000 remainder relates to noncredit losses. Wang's accounting for this impairment will reduce before-tax net income for 2024 Multiple Choice $0. $10,000. $33,000. $43,000.
Rell Corporation reports under IFRS No. 9. Rell has an investment in Tirish, Inc. bonds that Rell accounts for atamortized cost, given that the bonds pay only interest and principal and Rell’s business purpose is to hold the bondsto maturity. Rell purchased the bonds for €10,000,000. As of December 31, 2018, Rell calculates €750,000 ofcredit losses expected for default events occurring during 2019 and €450,000 of credit losses expected for defaultevents occurring after 2019. Required:1. Assume the Tirish bonds have not had a significant increase in credit risk. Prepare the journal entry to recordany impairment loss as of December 31, 2018.2. Assume the Tirish bonds have had a significant increase in credit risk. Prepare the journal entry to record anyimpairment loss as of December 31, 2018.3. Assume the Tirish bonds have not had a significant increase in credit risk, and that as of December 31, 2019,Rell calculates €650,000 of credit losses expected for default events occurring during…
Concord Corporation owns corporate bonds at December 31, 2023, accounted for using the amortized cost model. These bonds have a par value of $992,000 and an amortized cost of $ 977,000. After an impairment review was triggered, Concord determined that the discounted impaired cash flows are $914,500 using the current market rate of interest, but are $910,000 using the market rate when the bonds were first acquired. The compary follows a policy of directly reducing the carrying amount of any impaired assets. Assume that no impairment loss had been recorded earlier. (a1) Assuming Concord is a private enterprise that applies ASPE, prepare the journal entry related to the impairment at December 31, 2023.
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On January 1, 2020, Dumaguete Company purchased bonds with face amount of P4,000,000 for P4,206,000. The business model of the entity in managing the financial asset is to collect contractual cash flows that are solely payment of principal and interest and also to sell the bonds in the open market. The entity has not elected the fair value option of measuring financial asset. The bonds mature on December 31, 2022 and pay 10% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 95 on December 31, 2020 and 90 on December 31, 2021. REQUIRED: What amount of unrealized loss should be reported as component of other comprehensive income in 2020? What amount of unrealized loss should be reported as component of other comprehensive income in 2021? What amount of cumulative unrealized loss should be reported in the statement of changes in equity on December 31, 2021?
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Bloom Corporation purchased $1,750,000 of Taylor Company 5% bonds, at their face amount, with neither the intent nor the ability to hold the bonds until they matured in 2028, so Bloom classifies its investment as AFS. Unfortunately, a combination of problems at Taylor Company and in the debt securities market caused the fair value of the Taylor investment to decline to $1,200,000 during 2024. The following are the two alternative scenarios that should be analyzed independent of each other. Bloom now believes it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $550,000 decline in fair value, Bloom attributes $325,000 to credit losses, and $225,000 to noncredit losses. Bloom does not plan to sell the Taylor bonds prior to maturity, and does not believe it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $550,000 decline…
Bloom Corporation purchased $1,000,000 of Taylor Company 5% bonds at par with the intent and ability to holdthe bonds until they matured in 2025, so Bloom classifies their investment as HTM. Unfortunately, a combinationof problems at Taylor Company and in the debt market caused the fair value of the Taylor investment to declineto $600,000 during 2018.Required:For each of the following scenarios, prepare appropriate entry(s) at December 31, 2018, and indicate how thescenario will affect the 2018 income statement (ignoring income taxes).1. Bloom now believes it is more likely than not that it will have to sell the Taylor bonds before the bonds havea chance to recover their fair value. Of the $400,000 decline in fair value, Bloom attributes $250,000 to creditlosses, and $150,000 to noncredit losses.2. Bloom does not plan to sell the Taylor bonds prior to maturity, and does not believe it is more likely thannot that it will have to sell the Taylor bonds before the bonds have a chance to…
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