A company holds available-for-sale corporate bonds purchased for $100,000. Current value of these securities is $95,000...
A company holds available-for-sale corporate bonds purchased for
$100,000. Current value of these securities is $95,000 and the
decline in value was properly recorded in OCI when the decline
occurred. The company now determines that the decline in value is
due to credit losses.
Which statement is true concerning the adjusting entry
needed to record this information?
|
a . |
No entry is made since the securities are already reported at $95,000. |
|
b |
Debit OCI and credit allowance for credit losses for $5,000. |
|
|
c. |
Debit OCI and credit investments for $5,000. |
|
|
D. |
Debit loss on securities (income) and credit OCI for $5,000. |
Homework Answers
Solution:
True statement concerning the adjusting entry needed to record this information "Debit loss on securities (income) and credit OCI for $5,000."
Hence option D is correct.
Add Answer to:
A company holds available-for-sale corporate bonds purchased for
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