Question

transactions during 2018: b. Disposition of them E15-11 Accounting for debt investments Peyton Investments completed the following investment transactions durin 2018 ond at face value. Peyton The Vedder bond pays Jan. 5 Purchased Vedder Company's $400,000 bond at face value. Per classified the investment as available-for-sale. The Vedder bor interest at the annual rate of 4% on June 30 and December 31 matures on December 31, 2021. Management's intent is to keep the bonds for several years. Jun. 30 Received an interest payment from Vedder. Dec. 31 Received an interest payment from Vedder. 31 Adjusted the investment to its current market value of $396,000.

Answer 1

DATE	ACCOUNTS TITLE	DR	CR
2018
5-Jan	investment in Vedder company-AFS	$400,000
	cash		$400,000
30-Jun	cash	$8,000
	Interest revenue		$8,000
	400000x.02
31-Dec	cash	$8,000
	Interest revenue		$8,000
31-Dec	unrealized loss on AFS-other comprehensive income	4000
	fair value adjustment-AFS		4000
	400000-396000
ANS 2	Balance sheet
	investments
	investment in AFS	400000
	LESS; FAIR VALUE ADJUSTMENT	4000	396000
	stockholder equity
	unrealized loss on AFS-other comprehensive income		-4000
ans 3	Comprehemsive Income statement
	net income	200000
	other comprehensive income
	unrealized loss on AFS-other comprehensive income	-4000
	ending balance	196000
if any doubt please comment