Question

Sunland Corporation has municipal bonds classified as a held-to-maturity at December 31, 2017. These bonds have a par value of $732,000, an amortized cost of $732,000, and a fair value of $648,000. The company believes that impairment accounting is now appropriate for these bonds.

Prepare the journal entry to recognize the impairment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title to record the impairment enter a debit amount enter a credit amount enter an account title to record the impairment enter a debit amount enter a credit amount (To record the impairment.) SHOW LIST OF ACCOUNTS LINK TO TEXT

What is the new cost basis of the municipal bonds? New cost basis of the municipal bonds $enter a dollar amount of the new cost basis of the municipal bonds Given that the maturity value of the bonds is $732,000, should Sunland Corporation amortize the difference between the carrying amount and the maturity value over the life of the bonds? select between Yes or No NoYes SHOW LIST OF ACCOUNTS LINK TO TEXT

At December 31, 2018, the fair value of the municipal bonds is $692,000. Prepare the entry (if any) to record this information. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount

Answer 1

Anars; the fimpeirment: the Jounal entry O pepane the Junel enty to vecogpiat Loss on impairment = $138,000 - b48,000 =$84000 DebitC4) Citditle) Alcourt Titles and eplanation. $84.000 impintneat Loss an $841000 Debt. înuestment O The new cast basis d the municipal bonds :- $৫५৪।000 Nkw cast bas,s f the preunici fal bonds Given that the wluc d bonds $ 73,000, should votunity Sunlond con poration amortiae the diflt bls amount carying and maturity value over-the life d the bonds ? Ay, NO No, sunlond skould not amortiae the dillirence.

the eotry to record this infamation;- prepar fair volue adjusimeat = $6ga.00 - 6481000 =$44000 Date Debit CE2 crditle) acccuint Titke E Explanadtion Dec31,2017 fair vlere. adjustment Cavilable for sale.)$ 44,00 Ifuni00. lunvcalized kolding gain forjloss-rite