Intermediate Accounting: Reporting and Analysis
2nd Edition
ISBN: 9781285453828
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 13, Problem 14E
1.
To determine
Record the journal entries in the book of Company H under U.S GAAP.
2.
To determine
Record the journal entries in the book of Company H under IFRS.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Current Attempt in Progress
In its first year of operations, Sheridan Corporation purchased available-for-sale debt securities costing $68,500 as a long-term
investment. At December 31, 2022, the fair value of the securities is $63.650.
Prepare the adjusting entry to record the securities at fair value. (List all debit entries before credit entries. 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
O for the amounts.)
Date
Dec. 31
Account Titles and Explanation
Debit
Credit
Sheridan Company in its first year of operations provides the following information related to one of its available-for-sale debt
securities at December 31, 2025.
Amortized cost
Fair value
Expected credit loss
(a)
$50,800
41,600
12.450
Your answer is correct.
What is the amount of the credit loss that Sheridan should report on this available-for-sale security at December 31, 2025? (Do
not leave any answer field blank. Enter O for amounts.)
Amount of the credit loss. $
9200
Requirement 3. Prepare a comprehensive income statement for Thyme Investments for year ended December 31, 2018. Assume net income was $320,000. (Use a minus sign or parentheses to enter a loss.)
2018
Jan. 5
Purchased Vince Company's $525,000 bond at face value. Thyme classified the investment as available-for-sale. The Vince bond pays interest at the annual rate of 6% on June 30 and December 31 and matures on December 31, 2021 Management's intent is to keep the bonds for several years .
June 30
Received an interest payment from Vince
Dec.31
Received an interest payment from Vince.
Dec.31
Adjusted the investment to its current market value of $518.500 .
Chapter 13 Solutions
Intermediate Accounting: Reporting and Analysis
Ch. 13 - Prob. 1GICh. 13 - Provide brief definitions for the following terms:...Ch. 13 - Prob. 3GICh. 13 - Prob. 4GICh. 13 - Prob. 5GICh. 13 - Briefly summarize the accounting for an investment...Ch. 13 - Prob. 7GICh. 13 - Prob. 8GICh. 13 - Prob. 9GICh. 13 - Prob. 10GI
Ch. 13 - Prob. 11GICh. 13 - Prob. 12GICh. 13 - Prob. 13GICh. 13 - Prob. 14GICh. 13 - Briefly describe how to determine and record the...Ch. 13 - Prob. 16GICh. 13 - Prob. 17GICh. 13 - Prob. 18GICh. 13 - Prob. 19GICh. 13 - How does IFRS categorize minority passive...Ch. 13 - Prob. 21GICh. 13 - Prob. 22GICh. 13 - Prob. 23GICh. 13 - Prob. 24GICh. 13 - Prob. 25GICh. 13 - Prob. 26GICh. 13 - Prob. 27GICh. 13 - What is a fund? Distinguish between a fund and an...Ch. 13 - Prob. 29GICh. 13 - Prob. 30GICh. 13 - On January 1, 2016, Weaver Company purchased as...Ch. 13 - Prob. 2MCCh. 13 - Prob. 3MCCh. 13 - Prob. 4MCCh. 13 - Prob. 5MCCh. 13 - Prob. 6MCCh. 13 - A security in a portfolio of available-for-sale...Ch. 13 - Prob. 8MCCh. 13 - Cash dividends declared out of current earnings...Ch. 13 - Prob. 10MCCh. 13 - Prob. 1RECh. 13 - Prob. 2RECh. 13 - Prob. 3RECh. 13 - Prob. 4RECh. 13 - Prob. 5RECh. 13 - Prob. 6RECh. 13 - Prob. 7RECh. 13 - Prob. 8RECh. 13 - Prob. 9RECh. 13 - Prob. 10RECh. 13 - Prob. 11RECh. 13 - Prob. 12RECh. 13 - Prob. 13RECh. 13 - On January 1, Kilgore Inc. accepts a 20,000...Ch. 13 - Prob. 15RECh. 13 - Prob. 16RECh. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Prob. 7ECh. 13 - Prob. 8ECh. 13 - Prob. 9ECh. 13 - Prob. 10ECh. 13 - Prob. 11ECh. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Prob. 14ECh. 13 - Prob. 15ECh. 13 - Prob. 16ECh. 13 - Prob. 17ECh. 13 - Prob. 18ECh. 13 - Prob. 19ECh. 13 - Prob. 20ECh. 13 - Prob. 21ECh. 13 - Prob. 22ECh. 13 - Prob. 23ECh. 13 - Prob. 24ECh. 13 - Prob. 25ECh. 13 - Prob. 26ECh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Prob. 5PCh. 13 - Prob. 6PCh. 13 - Trading Securities 8th State Bank prepares interim...Ch. 13 - Available-for-Sale Securities Holly Company...Ch. 13 - Investments in Equity Securities Noonan...Ch. 13 - Available-for-Sale Investments Manson Incorporated...Ch. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Prob. 14PCh. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Prob. 19PCh. 13 - Prob. 20PCh. 13 - Prob. 21PCh. 13 - Prob. 22PCh. 13 - Prob. 23PCh. 13 - Prob. 1CCh. 13 - Investments in Securities Cane Company has two...Ch. 13 - Prob. 3CCh. 13 - Prob. 4CCh. 13 - Available-for-Sale Securities The following are...Ch. 13 - Prob. 6CCh. 13 - Prob. 7CCh. 13 - Prob. 8CCh. 13 - Prob. 9CCh. 13 - Prob. 10C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Transfer between Categories On December 31, 2018, Leslie Company held an investment in bonds of Kaufmann Company which it categorized as being held to maturity. At that time, the 8%, 100,000 face value bonds had a carrying value of 107,023.56 and were being amortized using the effective interest method based on a market rate of 7%. Interest on these bonds is paid annually each December 31. On December 31, 2019, after recording the interest earned, Leslie decided to reclassify the Kaufmann bonds to its available-for-sale category in anticipation of a major restructuring. At that time, the ending quoted market price for the bonds was 105,000. Required: Prepare the journal entries on December 31, 2019, to record the interest earned and the reclassification.arrow_forwardInformation On its December 31, 2024 balance sheet, Pharoah Company appropriately reported a $10,000 debit balance in its Fair Value Adjustment account. There was no change during 2025 in the composition of Pharoah's portfolio of debt investments held as available-for- sale debt securities. The following information pertains to that portfolio: Security Date 11/1/2026 XYN Z Cost Instructions Record the year-end entry to adjust the debt investments to fair value. Account $138,000 108000 191000 $437,000 Debit Fair value at 12/31/25 $172,000 96000 141000 $409,000 Creditarrow_forwardIvanhoe Company issued $530,000, 10-year, 8% bonds at 103. (a) Prepare the journal entry to record the sale of these bonds on January 1, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 enter an account title to record the sale of these bonds on January 1, 2017enter an account title to record the sale of these bonds on January 1, 2017 enter a debit amountenter a debit amount enter a credit amountenter a credit amount enter an account title to record the sale of these bonds on January 1, 2017enter an account title to record the sale of these bonds on January 1, 2017 enter a debit amountenter a debit amount enter a credit amountenter a credit amount enter an account title to record the sale of these bonds on January 1, 2017enter an account title to record the sale of these bonds on January 1, 2017 enter a debit…arrow_forward
- Accounting for debt investments On February 1, 2018, Bell Co. decides to invest excess cash of $16,800 by purchasing a Grant, Inc. bond at face value. At year-end, December 31, 2018, the fair value of the Grant bond was $19,600. The investment is categorized as a trading debt investment. Requirements Journalize the transactions for Bell’s investment in Grant, Inc. for 2018. In what category and at what value would Bell report the asset on the December 31, 2018, balance sheet? In what account would the market price change in Grant’s bond be reported, if at all? What was the net effect of the investment on Bell’s net income for the year ended December 31, 2018?arrow_forwardMarigold 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 $51,100 Fair value 42,200 Expected credit losses 12,600 A. What is the amount of credit loss that marigold should report on this available-for-sale security at december 31, 2020? Amount of the credit loss $ 8,900 B. Prepare the journal entry to record the credit loss, if any ( and other adjustments needed), at December 31, 2020? date account titles and explanations debit credit 12/31/20 8,900 8,900 Please note that the answer is NOT Debit Loss on available for sale debt securities and Credit avilable for sale debt securities. These are the account titles I can choose from... Accumulated Other…arrow_forwardOn June 1, 2019, Hansen Company purchased ten $1,000 Francisco Company bonds at par and classified them as held-to-maturity. In 2020, Francisco experienced financial difficulties and on Dec 31, 2020, based on an evaluation of the investment, Hansen determined that expected credit losses are $4,000. In 2021, Francisco improved its financial condition, and, on Dec 31, 2021, Hansen believed that expected credit losses would only be $2,000. Required: Prepare the journal entries for Hansen to record the above events under U.S. GAAP.arrow_forward
- s. The Solstice Corp. bonds have a fair value of $ 253,630 on December 31, 2015. Valuation Allowance for Available-for-Sale Investments had a balance of zero on January 1, 2015. c. Issued $500,000 of 10 - year, 5% bonds at 104, with interest payable semiannually. p. Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for 6 months. The amortization is determined using the straight-line method. s. The Solstice Corp. bonds have a fair value of $253,630 on December 31, 20Y5. Valuation Allowance for Available-for-Sale Investments had a balance of zero on January 1, 2015. Description Unrealized Gain (Loss) on Available-for-Sale Investments Valuation Allowance for Available-for-Sale Investments Debit Credit 253,630 × Alpha-numeric input fieldarrow_forwardOn January 1, 2017, KLM Company purchased bonds with faceamount of 5,000,000. The entity paid 4,600,000 plus transaction cost of 142,290. The bonds mature on December 31, 2019 and pay 6% interest annually on December 31 of each year with 8% effective yield. The bonds were quoted at 106.5 on December 31, 2017 and 108 on December 31, 2018. Assume that the business model in managing financial asset is to collect contractual cash flows that are solely for payment of principal and interest and also to sell the bonds in an open market. What is the balance of unrealized gain-OCI on December 31, 2017?arrow_forwardIvanhoe Corporation has municipal bonds classified as a held-to-maturity at December 31, 2025. These bonds have a par value of $732,000, an amortized cost of $732,000, and a fair value of $648,000. The company believes that impairment accounting is now appropriate for these bonds. (a) Your answer is partially correct. Prepare the journal entry to recognize the impairment. (List debit entry before credit entry. 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.) Account Titles and Explanation Debit Credit Loss on Impairment Debt Investmentsarrow_forward
- Ivanhoe Corporation has municipal bonds classified as a held-to-maturity at December 31, 2025. These bonds have a par value of $732,000, an amortized cost of $732,000, and a fair value of $648,000. The company believes that impairment accounting is now appropriate for these bonds. (a) Your answer is partially correct. Prepare the journal entry to recognize the impairment. (List debit entry before credit entry. 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 O for the amounts.) Account Titles and Explanation Loss on Impairment Debit 84000 Credit Debt Investments 84000arrow_forwardOn June 1, 2019, Hansen Company purchased twenty $1,000 Francisco Company bonds at par and classified them as held-to-maturity. In 2020, Francisco experienced financial difficulties and on Dec 31, 2020, based on an evaluation of the investment, Hansen determined that expected credit losses are $4,200. In 2021, Francisco improved its financial condition, and, on Dec 31, 2021, Hansen believed that expected credit losses would only be $2,100. Required: Prepare the journal entries for Hansen to record the above events under U.S. GAAP.arrow_forwardQuestion: Saberhagen Company sold $3,500,000, 8%, 10-year bonds on January 1, 2020. The bonds were dated January 1, 2020, and pay interest annually on January 1. Saberhagen Company uses the straight-line method to amortize bond premium or discount. (a) Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2017, assuming that the bonds sold at 104. Amortization $14,000 (b) Prepare journal entries as in part (a) assuming that the bonds sold at 98. Amortization $7,000 (c) Show balance sheet presentation for the bonds at December 31, 2017, for both the requirements in (a) and (b). Premium on bonds payable $3,626,000 D0iscount on bonds payable $3,437,000arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Financial instruments products; Author: fi-compass;https://www.youtube.com/watch?v=gvxozM3TUIg;License: Standard Youtube License