1. Record the investment
2. Record the investment revenue realized.
3. Record the fair value adjustment.
Homework Answers
Solution:
| Journal Entries | ||||
| Event | Date | Particulars | Debit | Credit |
| 1 | 02-Jan-21 | Investment in ICA Company Dr | $1,18,00,000 | |
| To Cash | $1,18,00,000 | |||
| (Being investment recorded) | ||||
| 2 | 30-Dec-21 | Cash Dr ($680000*35%) | $2,38,000 | |
| To Investment revenue | $2,38,000 | |||
| (To record Investment revenue realized) | ||||
| 3 | 31-Dec-21 | Fair value adjustment Dr ($15100000-11800000) | $33,00,000 | |
| To Unrealized holding gain or loss | $33,00,000 | |||
| (To record Fair value adjustment) | ||||
Add Answer to:
1. Record the investment
2. Record the investment revenue realized.
3. Record the fair value adjustment....
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JOURNAL ENTRY: 1) Record the entry to adjust to fair value on the date of sale....
JOURNAL ENTRY:
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1) Record the purchase of Jackson Industry capital stock for $91 million. 2) Record Sanborn Tobacco's...
1) Record the purchase of
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2) Record Sanborn Tobacco's portion of Jackson Industry's net
income of $121 million.
3) Record the dividend revenue.
4) Record the fair value adjustment.
Required Information [The following information applies to the questions displayed below.] On January 2, 2021, Sanborn Tobacco Inc. bought 10% of Jackson Industry's capital stock for $91 million. Jackson Industry's net income for the year ended December 31, 2021, was $121 million. The fair...
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1 to 3: Record the investment bonds on Jan 1, 2021. Record the interest revenue on...
1 to 3:
Record the investment bonds on Jan 1, 2021.
Record the interest revenue on June 30, 2021.
Record the interest revenue on Dec 21, 2021.
Req 4A:
At what amount will Fuzzy Monkey report its investment in the
Dec 31, 2021 balance sheet?
Req 4B:
Record any necessary entry to report the investment at the
correct value on the balance sheet
Req 5:
How would Fuzzy Monkey's 2021 statement of cash flows be
affected by this investment assuming...
The accounting records of Jamaican Importers, Inc., at January 1, 2018, included the following: Assets Investment...
The accounting records of Jamaican Importers, Inc., at January 1, 2018, included the following: Assets Investment in IBM common shares Less: Fair value adjustment $2,145,000 (225,000) $1,920,000 No changes occurred during 2018 in the investment portfolio Required: Prepare appropriate adjusting entry(s) at December 31, 2018, assuming the fair value of the IBM common shares was: 1. $1,401,000 2. $1,946,000 3. $2,165,000 (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View...
Turner Company purchased 25% of the outstanding stock of ICA Company for $10,900,000 on January 2, 2021. Turner elects the fair value option to account for the investment. During 2021, ICA reports $840,000 of net income and on December 30 pays a dividend of $580,000. On December 31, 2021, the fair value of Turner's investment has increased to $13,300,000. Prepare the journal entries in the books of Turner to account for this investment during 2021. Assume that Turner will account...
1) Record the entry for fair value adjustment of
December 31, 2021.
2)Record the entry to adjust to fair value on the date
of sale
3) Record the entry to reverse the previous fair value
adjustment.
4) Record the entry for sale of investment in Coca
Cola bonds.
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 $885,000 and sold the bonds on January 3,...
1) Record the entry for credit losses.
2)Record the entry for fair value adjustment
market price of Branch's bonds fell by $1,400,000, due to concerns about one of the company's principal drugs. The concerns were justified when the FDA banned the drug. $100,000 of that decline in value already had been included in Ocl as a temporary unrealized loss in a prior period. LED views $960,000 of the $1,400,000 loss as related to credit losses, and the other $440,000 as...
JOURNAL ENTRY:
1) Record the entry to adjust to fair value on the date of
sale.
2) Record the sale of stock on January 2, 2022 for $112
million.
Required Information [The following information applies to the questions displayed below.] On January 2, 2021, Sanborn Tobacco Inc. bought 10% of Jackson Industry's capital stock for $91 million. Jackson Industry's net Income for the year ended December 31, 2021, was $121 million. The fair value of the shares held by Sanborn...
1. record entry for credit loss
2. record entry for fair value adjustment
Help Save LED Corporation owns $1.950,000 of Branch Pharmaceuticals bonds and classifies its investment as securities available for sale. The market price of Branch's bonds fell by $1,400,000, due to concerns about one of the company's principal drugs. The concerns were justified when the FDA banned the drug. $100,000 of that decline in value already had been included in Ocl as a temporary unrealized loss in a...
1) Record the purchase of
Jackson Industry capital stock for $91 million.
2) Record Sanborn Tobacco's portion of Jackson Industry's net
income of $121 million.
3) Record the dividend revenue.
4) Record the fair value adjustment.
Required Information [The following information applies to the questions displayed below.] On January 2, 2021, Sanborn Tobacco Inc. bought 10% of Jackson Industry's capital stock for $91 million. Jackson Industry's net income for the year ended December 31, 2021, was $121 million. The fair...
2. Prepare appropriate adjusting entry(s) at December 31, 2021, assuming the fair value of the IBM common shares was: $1,946,000 (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 3. Prepare appropriate adjusting entry(s) at December 31, 2021, assuming the fair value of the IBM common shares was: $2,165,000 (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) ! Required information [The...
1 to 3:
Record the investment bonds on Jan 1, 2021.
Record the interest revenue on June 30, 2021.
Record the interest revenue on Dec 21, 2021.
Req 4A:
At what amount will Fuzzy Monkey report its investment in the
Dec 31, 2021 balance sheet?
Req 4B:
Record any necessary entry to report the investment at the
correct value on the balance sheet
Req 5:
How would Fuzzy Monkey's 2021 statement of cash flows be
affected by this investment assuming...
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