Question

Freedom Corporation buys and sells debt securities which it classifies as trading securities.


Freedom Corporation buys and sells debt securities which it classifies as trading securities. The company's fiscal year ends on December 31. On December 27, 2021, Freedom purchased Western Communications bonds at par for $550,000. At December 31, the bonds had a fair value of 565,000. On January 3, 2022, the bonds were sold for $584,000. The amount included in 2021 Freedom's net income as a result of this investment would be: 

(Do not add dollar sign; do not add comma by yourself to your amount round the answer to the whole number, use minus sign if the amount is negative) 

2 0
Add a comment Improve this question Transcribed image text
Answer #1
Trading securities are recorded in Balance Sheet at their fair value.
Any changes in fair value of Trading securities are recognized in Income statement.
Amount included in 2021 Freedom's net income 15000 =565000-550000
Add a comment
Know the answer?
Add Answer to:
Freedom Corporation buys and sells debt securities which it classifies as trading securities.
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT