Homework Answers
Solution:
The true statement regarding available for sale debt investment is "The realized gain on sale is determined by comparing the amortized cost of the investment with its selling price"
Hence option d is correct.
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Which of the following statements regarding available-for-sale debt investments is true? Select one: O a. Unrealized...
At the beginning of 2018, Ace Company had the following portfolio of investments in available-for-sale debt...
At the beginning of 2018, Ace Company had the following portfolio of investments in available-for-sale debt securities (all of which were acquired at par value): Security Cost 1/1/18 Fair Value A $35,000 $44,000 B 53,000 50,000 Totals $88,000 $94,000 During 2018, the following transactions occurred: May 3 Purchased C debt securities at their par value for $50,000. July 1 Sold all of the A securities for $44,000 plus interest of $1,000. Dec. 31 Received interest of $1,000 on the B...
Need help in analysis the below Debt Investment paragraph. DEBT INVESTMENTS We consider all highly liquid...
Need help in analysis the below Debt Investment paragraph. DEBT INVESTMENTS We consider all highly liquid debt investments with original maturities from the date of purchase of three months or less as cash equivalents. Cash equivalents can include investments such as corporate debt, financial institution instruments, government debt,and reverse repurchase agreements.Marketable debt investments are generally designated as trading assets when a market risk is economically hedged at inception with a related derivative instrument, or when the marketable debt investment itself...
At the beginning of 2019, Ace Company had the following portfolio of investments in available-for-sale debt...
At the beginning of 2019, Ace Company had the following
portfolio of investments in available-for-sale debt securities (all
of which were acquired at par value):
Security
Cost
1/1/19 Fair Value
A
$35,000
$44,000
B
53,000
50,000
Totals
$88,000
$94,000
During 2019, the following transactions occurred:
Transactions:
May
3
Purchased C debt securities at their par value for
$50,000.
July
1
Sold all of the A securities for $44,000 plus interest of
$1,000.
Dec.
31
Received interest of $1,000 on the...
Realized gains and losses on investments available-for-sale are reported Select one: O a. on the balance...
Realized gains and losses on investments available-for-sale are reported Select one: O a. on the balance sheet as part of shareholders' equity. O b. on the income statement. o c. as a contra asset. O d. as a current asset.
At the beginning of 2019, Ace Company had the following portfolio of investments in available-for-sale debt...
At the beginning of 2019, Ace Company had the following portfolio of investments in available-for-sale debt securities (all of which were acquired at par value): Security Cost 1/1/19 Fair Value A $15,000 $19,000 B 23,000 22,000 Totals $38,000 $41,000 During 2019, the following transactions occurred: Transactions: May 3 Purchased C debt securities at their par value for $45,000. July 1 Sold all of the A securities for $19,000 plus interest of $1,000. Dec. 31 Received interest of $1,000 on the...
At December 31, 2017, the available-for-sale debt portfolio for Skysong, Inc. is as follows. Unrealized Gain...
At December 31, 2017, the available-for-sale debt portfolio for Skysong, Inc. is as follows. Unrealized Gain (Loss) Security Cost Fair Value $27,000 25,200 45,900 $98,100 $(4,500) 2,700 4,500 $31,500 22,500 41,400 Total $95,400 Previous fair value adjustment balance-Dr. Fair value adjustment-Dr. 2,700 720 $1,980 On January 20, 2018, Skysong, Inc. sold security A for $27,180. The sale proceeds are net of brokerage fees. (a) Your answer is correct. Prepare the adjusting entry at December 31, 2017, to report the portfolio...
At the end of 2018, Terry Company prepared the following schedule of investments in available-for-sale debt...
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
60,000
63,200
3,200
Totals
$95,000
$97,400
$2,400
During 2019, the following transactions occurred:
July 1
Purchased Oscar Company debt securities with a par value of
100,000 for $97,000. The securities carry an annual interest rate
of 10%,...
At the beginning of 2018, Ace Company had the following portfolio of investments in available-for-sale debt securities (...
At the beginning of 2018, Ace Company had the following portfolio of investments in available-for-sale debt securities (all of which were acquired at par value): Security Cost 1/1/18 Fair Value A $25,000 $31,000 B 38,000 36,000 Totals $63,000 $67,000 During 2018, the following transactions occurred: May 3 Purchased C debt securities at their par value for $50,000. July 1 Sold all of the A securities for $31,000 plus interest of $1,000. Dec. 31 Received interest of $1,000 on the B...
Available-for-Sale Securities Instructions Chart of Accounts General Journal Analysis Next Level Instructions At the beginning of...
Available-for-Sale Securities Instructions Chart of Accounts General Journal Analysis Next Level Instructions At the beginning of 2018, Ace Company had the following portfolio of investments in available-for-sale debt securities (all of which were acquired at par value): Security Cost 1/1/18 Fair Value A $35,000 $44,000 B 53,000 50,000 Totals $88,000 $94,000 During 2018, the following transactions occurred: May 3 Purchased C debt securities at their par value for $50,000. July 1 Sold all of the A securities for $44,000 plus...
Question #2 The following are the cost and fair value for a debt investment (Available to...
Question #2 The following are the cost and fair value for a debt investment (Available to December 31, 2020. of investment Available for Sale) on Fair Value Debt Investment - Available for Sale Cost 10,000,000 $ $ 9,000,000 Assume the company had Net Income of $620,000 at the end of 2020 Required: 1) Calculate the Unrealized Holding Gains and Losses. 2) Does the Unrealized Holding Gains and Losses affect the Income Statement or Balance Sheet 3) Prepare the journal entry...
At the beginning of 2019, Ace Company had the following
portfolio of investments in available-for-sale debt securities (all
of which were acquired at par value):
Security
Cost
1/1/19 Fair Value
A
$35,000
$44,000
B
53,000
50,000
Totals
$88,000
$94,000
During 2019, the following transactions occurred:
Transactions:
May
3
Purchased C debt securities at their par value for
$50,000.
July
1
Sold all of the A securities for $44,000 plus interest of
$1,000.
Dec.
31
Received interest of $1,000 on the...
Realized gains and losses on investments available-for-sale are reported Select one: O a. on the balance sheet as part of shareholders' equity. O b. on the income statement. o c. as a contra asset. O d. as a current asset.
At December 31, 2017, the available-for-sale debt portfolio for Skysong, Inc. is as follows. Unrealized Gain (Loss) Security Cost Fair Value $27,000 25,200 45,900 $98,100 $(4,500) 2,700 4,500 $31,500 22,500 41,400 Total $95,400 Previous fair value adjustment balance-Dr. Fair value adjustment-Dr. 2,700 720 $1,980 On January 20, 2018, Skysong, Inc. sold security A for $27,180. The sale proceeds are net of brokerage fees. (a) Your answer is correct. Prepare the adjusting entry at December 31, 2017, to report the portfolio...
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
60,000
63,200
3,200
Totals
$95,000
$97,400
$2,400
During 2019, the following transactions occurred:
July 1
Purchased Oscar Company debt securities with a par value of
100,000 for $97,000. The securities carry an annual interest rate
of 10%,...
Question #2 The following are the cost and fair value for a debt investment (Available to December 31, 2020. of investment Available for Sale) on Fair Value Debt Investment - Available for Sale Cost 10,000,000 $ $ 9,000,000 Assume the company had Net Income of $620,000 at the end of 2020 Required: 1) Calculate the Unrealized Holding Gains and Losses. 2) Does the Unrealized Holding Gains and Losses affect the Income Statement or Balance Sheet 3) Prepare the journal entry...
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