Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Textbook Question
Chapter 15, Problem 3BP
Troy’s long-term available-for-sale portfolio at the start of this year consists of the following.
Troy enters into the following transactions involving its available-for-sale debt securities this year.
The fair values at December 31 are R, $568,125; S, $234,345; V, $134,940; and X, $45,625.
Required
- 1. Prepare
journal entries to record these transactions, including any necessary December 31adjusting entry to record the fair value adjustment of the long-term investments in available-for-sale securities. - 2. Determine the amount Troy reports on its December 31
balance sheet for its long-term investments in available-for-sale securities. - 3. What amount of gains or losses on transactions relating to long-term investments in available-for-sale securities does Troy report on its income statement for this year?
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Ticker Services began operations in Year 1 and holds long-term investments in available-for-sale debt securities. The year-end cost and
fair values for its portfolio of these investments follow.
Portfolio of Available-for-Sale Securities
December 31, Year 1
December 31, Year 2
December 31, Year 3
December 31, Year 4
View transaction list View journal entry worksheet
Prepare journal entries to record each year-end fair value adjustment for these securities.
No
3
Cost
$11,000
18,900
20,600
14,800
Date
Dec. 31, Year 3 No Transaction Recorded
Fair Value
$17,500
28,000
30, 200
19,700
General Journal
Debit
Credit
Ⓒ
At December 31, 2022, available-for-sale debt securities for Storrer, Inc. are as follows. The securities are considered to be a long-term investment.
Security. Cost. Fair Value
A $17,500 16,000
B 12,500 14,000
C 23,000 21,000
53,000 51,000
A. Prepare the adjusting entry at December 31, 2022 to report the securities at fair value.
B- Show the statement presentation at December 31,2022, after adjustment to fair value.
C- E. Kretsinger, a member of the board of directors, does not understand the reporting of the unreal-
ized gains or losses. Write a letter to Ms. Kretsinger explaining the reporting and the purposes that it serves.
The following amortization and interest schedule reflects the issuance of 10 year bonds by CMA Corporation on January 1, 2019, and the subsequent interest payment and charges. The Company’s year end is December 31, and the financial statements are prepared once yearly.
(a) On the basis of schedule above, prepare the journal entry to record the issuance of bonds on January 1, 2019(b) On the basis of the schedule above, prepare the journal entry or entries to reflect the bond transactions and accruals for 2019. (Interest is paid January 1)(c) On the basis of the schedule above, prepare the journal entry or entries to reflect the bond transactions and accruals for 2019. CMA Corporation does not use reversing entries
Chapter 15 Solutions
Principles of Financial Accounting.
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