ZuoTi.Pro
Question

Which type(s) of securities require a reclassification adjustment when an investment that has previously had unrealized...

Which type(s) of securities require a reclassification adjustment when an investment that has previously had unrealized gains or losses is sold for a realized gain or loss? Question 1 options: a) Held-to-maturity securities b) Available-for-sale securities c) Trading securities d) All of the above

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Reclassifications happen as a result of changes in management intentions which happens when reassessment is done at the balance sheet date.

Any reclassification from Held for Trading Securities (HFT) to Available for sale (AFS) / Held to Maturity (HTM) securities, no adjustments would be required as any unrealized gains or losses would already be recognized in the Income statement.

Reclassification from AFS/HTM to HFT, the unrealized gains or losses would require to be recognized in the Income statement.

There reclassification adjustment entries would be required for AFS/HTM reclassification.
Again, reclassification adjustments would be required for transfer from AFS to HTM and vice versa.

Summarizing, the answer would be a) Held to Maturity securities and b) Available for sale securities.

0 0
Add a comment
Know the answer?
Add Answer to:
Which type(s) of securities require a reclassification adjustment when an investment that has previously had unrealized...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Question 10 (1 point) Which category of securities is presented on the balance sheet at amortized...

    Question 10 (1 point) Which category of securities is presented on the balance sheet at amortized cost? Securities available for sale. Equity investments of less than 20 percent ownership Held-to-maturity securities. Trading securities Question 11 (1 point) Goofy Inc. bought a sizeable amount of Crazy Co.'s bonds for $150,000 on May 5. 2017, and classified the investment as available for sale. The market value of the bonds declined to $118.000 by December 31, 2017. Goofy reclassified this investment as trading...

  • S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2018, S&L...

    S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $892,000 and sold the bonds on January 3, 2019, for $895,500. At December 31, the bonds had a fair value of $889,000, and S&L has the intent and ability to hold the investment until fair value recovers. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2018 and (b) the sale of the bonds...

  • Exercise 16-12 a-b (Video) Sheridan Company has the following data at December 31, 2020. Securities Trading...

    Exercise 16-12 a-b (Video) Sheridan Company has the following data at December 31, 2020. Securities Trading Available-for-sale Cost $121,500 101,100 Fair Value $125,000 93,800 The available-for-sale securities are held as a long-term investment. Your answer is correct. Prepare the adjusting entries to report: (1) Trading securities at fair value and (2) Available-for-sale securities at fair value. (Credit acc entry" for the account titles and enter o for the amounts.) No. Account Titles and Explanation Debit Credit (1) Fair Value Adjustment-Trading...

  • Brief Exercise 12-5 Available-for-sale securities [LO12-4] S&L Financial buys and sells securities which it classifies as...

    Brief Exercise 12-5 Available-for-sale securities [LO12-4] S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2019, for $880,000. At December 31, the bonds had a fair value of $873,000, and S&L has the intent and ability to hold the investment until fair value recovers. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2018 and...

  • Time Left:0:44:46 Barnabas Harris: Attempt 1 Question 1 (1 point) Both trading securities and securities available...

    Time Left:0:44:46 Barnabas Harris: Attempt 1 Question 1 (1 point) Both trading securities and securities available for sale are reported at their fair values True False Question 2 (1 point) Net unrealized holding gains (losses) are reported in the income statement for trading securities. True False Question 3 (1 point) All securities considered available for sale should be reported as current assets in a classified balance sheet. True False Question 4 (1 point) When available-for-sale securities are sold, the amount...

  • S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2018, S&L...

    S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $885,000 and sold the bonds on January 3, 2019, for $892,500. At December 31, the bonds had a fair value of $878,000, and S&L has the intent and ability to hold the investment until fair value recovers. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2018 and (b) the sale of the bonds...

  • The income statement reports changes in fair value for which type of investment securities? Multiple Choice...

    The income statement reports changes in fair value for which type of investment securities? Multiple Choice Trading securities. Securities reported under the equity method. Held-to-maturity securities. Available-for-sale securities.

  • Question 1: S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27,...

    Question 1: S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2021, S&L purchased Coca-Cola bonds at par for $883,000 and sold the bonds on January 3, 2022, for $890,000. At December 31, the bonds had a fair value of $877,000, and S&L has the intent and ability to hold the investment until fair value recovers. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2021 and (b) the sale of...

  • Exercise 12-14 (Algo) Various investment securities (LO12-2, 12-3, 12-4) At December 31, 2021, Hull-Meyers Corp. had...

    Exercise 12-14 (Algo) Various investment securities (LO12-2, 12-3, 12-4) At December 31, 2021, Hull-Meyers Corp. had the following investments that were purchased during 2021, its first year of operations: Amortized cost Fair Value $ 920,000 125,000 $1,045,000 $ 932,000 119,600 $1,051,600 Trading Securities: Security A Security B Totals Securities Available-for-Sale: Security C Security D Totals Securities to Be Held-to-Maturity: Security E Security F Totals $ 720,000 920,000 $1,640,000 $ 798,000 935,800 $1,733,800 $ 510,000 635,000 $1,145,000 $ 520,500 629,600 $1,150,100...

  • 7 Which type of warrants require an allocation of the issuance proceeds between the bonds and...

    7 Which type of warrants require an allocation of the issuance proceeds between the bonds and the warrants under US GAAP A) Non detachable B) Detachable C) Both of the above D) Neither of the above 8. The intrinsic value of a stock option is the difference between the market price of the stock and the exercise price of the options A) True B) False 9. The conversion of bonds is recorded by using the A) incremental method. B) proportional...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT