Question

Intermediate Accounting Bus 203 INVESTMENTS REVIEW 1. Which of the following gains and losses on Held-to-maturity (debt) securities should be included in income? a) Only unrealized gains and realized losses. b) All unrealized losses and unrealized gains. c) Only realized gains and realized losses. d) All gains and unrealized losses. 2. What would be the accounting treatment for a company's Investment in Stock portfolio if on December 31, 2019. the cost of the portfolio was $500,000 and the market value was $420,000? The account Fair Value Adjustment (Valuation) account has a credit balance from December 31, 2018, of $7,000 a) Debit Fair Value Adjustment for $73,000. b) Credit Fair Value Adjustment for $80,000. c) Debit Unrealized Holding Loss (Income) for $73,000. d) Debit Unrealized Holding Loss for $80,000. 3. On January 1, 2019, Whaler Company purchased (invested) $8,000,000 face value Delta Company's 3% bonds due on December 31, 2023. The bonds pay Interest semi-annually on January 1 and July 1. The bonds were purchased at a discount for $7,500,000 and provide a yield of 4%. Determine the amount of total interest revenue that Whaler should report on its December 31, 2019 income statement a) $240,000 b) $300,000 c) $120,000 d) $150,000

Answer 1

Answer to Question 1 : - Opetion (c) Only Realised Gains and Losses

Answer to Question 2 : - Option (a) Debit the Fair Value Adjustment Account for $ 73000

Answer to Question 3 : - Option (a) $ 240,000