Available-for-sale securities : These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Debit and credit rules : Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts. Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts. To journalize : The stock investment transactions in the books of Incorporation H.

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Answer 1

Question

Chapter 13, Problem 21EX

a)

To determine

Available-for-sale securities:

These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The stock investment transactions in the books of Incorporation H.

b)

To determine

To describe: The accounting treatment of available-for-sale securities, which makes it distinct from trading securities.

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(Equity Investments) Castleman Holdings, Inc. had the following equity investment portfolio at January 1, 2017. Evers Company 1,000 shares @ $15 each $15,000 Rogers Company 900 shares @ $20 each 18,000 Chance Company 500 shares @ $9 each 4,500 Equity investments @ cost 37,500 Fair value adjustment (7,500) Equity investments @ fair value $30,000 During 2017, the following transactions took place.1. On March 1, Rogers Company paid a $2 per share dividend.2. On April 30, Castleman Holdings, Inc. sold 300 shares of Chance Company for $11 per share.3. On May 15, Castleman Holdings, Inc. purchased 100 more shares of Evers Company stock at $16 per share.4. At December 31, 2017, the stocks had the following price per share values: Evers $17, Rogers $19, and Chance $8.During 2018, the following transactions took place.5. On February 1, Castleman Holdings, Inc. sold the remaining Chance shares for $8 per share.6. On March 1, Rogers Company paid a $2 per share dividend.7. On…

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Purchases of common stock by jamison december 31 2016 Company Invested In Cost Fair Value Readfield 125,000 115,500 Lee 100,000 80,000 Stern 250,000 300,000 Jones 180,000 190,000 These are classified as trading security by jamison, who uses the portfolio approach During 2017 lee company's stock was sold for 102,000 and jamison purchased common stock of earnhart company at a cost of 163,300 at the end of 2017 the fair values of the trading securities are as follows readfield 111,800 stern 310,000 jones 171,600 earnhart 159,250 a) make the adjustment entry for the portfolio at december 31 2016 to report the fair value of investment in the balance sheet b) prepare the journal entry to record the sale of lee company's stock in jamisons book in 2017 c) prepare the journal entry to record the purchase of earnharts's common stock by jamison d) calculate the fair value of the portfolio as of december 31 2017 e) make the adjustment entry for the portfolio at december…

Answer 2

Question

Chapter 13, Problem 21EX

a)

To determine

Available-for-sale securities:

These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The stock investment transactions in the books of Incorporation H.

b)

To determine

To describe: The accounting treatment of available-for-sale securities, which makes it distinct from trading securities.

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Answer 3

Question

Chapter 13, Problem 21EX

a)

To determine

Available-for-sale securities:

These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The stock investment transactions in the books of Incorporation H.

b)

To determine

To describe: The accounting treatment of available-for-sale securities, which makes it distinct from trading securities.

Expert Solution & Answer

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Answer 4

Question

Chapter 13, Problem 21EX

a)

To determine

Available-for-sale securities:

These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The stock investment transactions in the books of Incorporation H.

b)

To determine

To describe: The accounting treatment of available-for-sale securities, which makes it distinct from trading securities.

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Answer 5

Chapter 13, Problem 21EX

a)

To determine

Available-for-sale securities:

These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The stock investment transactions in the books of Incorporation H.

b)

To determine

To describe: The accounting treatment of available-for-sale securities, which makes it distinct from trading securities.

Answer 6

Chapter 13, Problem 21EX

a)

To determine

Available-for-sale securities:

These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The stock investment transactions in the books of Incorporation H.

Answer 7

Chapter 13, Problem 21EX

a)

To determine

Available-for-sale securities:

These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The stock investment transactions in the books of Incorporation H.

Answer 8

b)

To determine

To describe: The accounting treatment of available-for-sale securities, which makes it distinct from trading securities.

Answer 9

b)

To determine

To describe: The accounting treatment of available-for-sale securities, which makes it distinct from trading securities.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 13 - Prob. 1DQ Ch. 13 - What causes a gain or loss on the sale of a bond...Ch. 13 - Prob. 3DQ Ch. 13 - Prob. 4DQ Ch. 13 - Prob. 5DQ Ch. 13 - Prob. 6DQ Ch. 13 - Prob. 7DQ Ch. 13 - Prob. 8DQ Ch. 13 - What are the factors contributing to the trend...Ch. 13 - Prob. 10DQ

Solution Summary: The author explains that available-for-sale securities are short-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes.

To describe: The accounting treatment of available-for-sale securities, which makes it distinct from trading securities.

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Chapter 13 Solutions