Presented below is selected information related to the financial instruments of Pronghorn Company at December 31, 2020. This is Pronghorn Company’s first year of operations.     Carrying Amount   Fair Value (at December 31) Investment in debt securities (intent is to hold to maturity)   $42,700   $43,600 Investment in Chen Company stock   848,500   952,100 Bonds payable   237,600   213,400 (a) Pronghorn elects to use the fair value option for these investments. Assuming that Pronghorn’s net income is $106,200 in 2020 before reporting any securities gains or losses, determine Pronghorn’s net income for 2020. Assume that the difference between the carrying value and fair value is due to credit deterioration. Pronghorn’s net income for 2020   $  (b) Record the journal entry, if any, necessary at December 31, 2020, to record the fair value option for the bonds payable. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

At the end of 2018, Terry Company prepared the following schedule of investments in available-for-sale debt securities (all of which were acquired at par value): Company Amortized Cost 12/31/18 Fair Value Cumulative Change in Fair Value Morgan Company $35,000 $34,200 $(800) Nance Company 50,000 53,100 3,100 Totals $85,000 $87,300 $2,300 During 2019, the following transactions occurred: July 1 Purchased Oscar Company debt securities with a par value of 100,000 for $98,000. The securities carry an annual interest rate of 10%, mature on December 31, 2021, and pay interest seminannually on July 1 and December 31. Terry uses the straight-line method to amortize any discounts or premiums. Oct. 11 Sold all of the Morgan Company securities for $33,000 plus interest of $1,300. Dec. 31 Received interest of $6,000 on the Nance Company and Oscar Company debt securities, and the following yearend total market values were available: Nance Company debt securities, $55,000; Oscar…

An investor company purchased $427,000 of 8% bonds from the investee company on January 1, 2020, with interest payable on December 31. The bonds were classified as Available-for-Sale. The bonds sold for $706,390. Using the effective-interest method, the investor company revised the Available-for-Sale Debt Securities account on December 31, 2020 and December 31, 2021 by the amortized discount/premium of $6,470. and $8,200, respectively. At December 31, 2020, the fair value of the investee company bonds was $912,000. At December 31, 2021, the fair value of the investee company bonds was $843,000. What is the amount of unrealized holding gain/loss related to this investment in 2021? (Very important: Just enter the amount. DO NOT put a plus or minus sign in front of the amount.)

At December 31, 2020, the available-for-sale debt securities for Larkspur, Inc. are as follows. Security Cost Fair Value X $28,600 $24,960 Y 13,000 13,520 23,920 18,720 $65,520 $57,200 (a) Prepare the adjusting entry at December 31, 2020, to report the securities at fair value. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry.) Date Account Titles and Explanation Dec. 31 N

Morley Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amortized cost   $50,000 Fair value   40,000 Expected credit loss   12,000    a. What is the amount of the credit loss that Morley should report on this available-for-sale security at December 31, 2020?  b. Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2020.  c. Assume that the fair value of the available-for-sale security is $53,000 at December 31, 2020, instead of $40,000. What is the amount of the credit loss that Morley should report at December 31, 2020?  d. Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2020.

In its first year of operations, Wildhorse Corporation purchased, available-for-sale debt securities costing $65.000 as a long-term investment. At December 31, 2022, the fair value of the securities is $60,500. Show the financial statement presentation of the securities and related accounts. Assume the securities are noncurrent. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45)) WILDHORSE CORPORATION Balance Sheet 4 $

Hillis Corporation issued $600,000 of 13% bonds on January 1, 2019, for $614,752.24. The bonds are due December 31, 2021, were issued to yield 12%, and pay interest semiannually on June 30 and December 31. Hillis uses the effective interest method. Required: 1. Prepare a bond interest expense and premium amortization schedule. 2. Assume the company retired the bonds on September 30, 2021, for $630,000, which includes accrued interest. Prepare the journal entry to record the bond retirement.

On July 1, Year 1, Hill Inc. bought and classified the following 10-year debt investments as trading securities. At December 31, Year 1, Hill prepares its financial statements for the end of the fiscal year. At December 31, Year 1, Hill determines the fair value of these securities: Security Cost Fair Value AX PH JB $100,000 40,000 82,000 $94,000 64,000 85,000 At what amount will Hill report these investments in its balance sheet at December 31, Year 1, and how will they be classified? Select one: a. $243,000; current assets Ob. $222,000; current assets о c. $222,000; long-term assets d. $140,000; current assets

On January 1, 20x1, SENECTITUDE OLD AGE Co. issued its 12%, 3-year, P2,000,000 convertible bonds at 110. Each P1,000 bond is convertible into 8 shares with par value per share of P100. Principal is due on December 31, 20x3 but interests are due annually at each year-end. When the bonds were issued, they were selling at a yield to maturity market rate of 10% without the conversion option. On December 31, 20x2, half of the bonds were converted into equity. Conversion costs incurred amounted to P20,000. Requirements: a. Provide the pertinent entries. b. Net increase in equity as a result of the conversion. c. Net increase in "share premium" general account as a result of the conversion.

On August 1, 2021, Crane Company acquired 1310, $1000, 9% bonds at 97 plus accrued interest. The bonds were dated May 1, 2018, and mature on April 30, 2027, with interest paid each October 31 and April 30. The bonds will be added to Crane’s available-for-sale portfolio. The preferred entry to record the purchase of the bonds on August 1, 2021 isa. Debt Investments 1310000   Interest Revenue 29475         Discount on Debt Investments 39300       Cash   1300175 b. Debt Investments 1300175         Cash   1300175 c. Debt Investments 1270700   Interest Receivable 29475         Cash   1300175 d. Debt Investments 1270700   Interest Revenue 29475         Cash   1300175