Brief Exercise 12-5 Available-for-sale securities [LO12-4] S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2019, for $880,000. At December 31, the bonds had a fair value of $873,000, and S&L has the intent and ability to hold the investment until fair value recovers. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2018 and (b) the sale of the bonds in 2019, including recognition of any unrealized gains in 2019 prior to sale and reclassification of amounts out of OCI. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry 1. Record the entry for fair value adjustment of (Dec 31, 2018) 2. Record the entry to adjust to fair value on the date of sale (January 03, 2019) 3. record the entry to reverse the previous fair value adjustment (January 03, 2019) 4. Record the entry for sale of investment in Coca Cola bonds (January 03, 2019) Total 4 Journal entry...
Date |
Accounts and explanations |
Debit ($) |
Credit ($) |
27-12-18 |
Coca-Cola Bond |
875000 |
|
Bank |
875000 |
||
(Being coca cola bond purchased) |
|||
31-12-18 |
Profit and loss account (875000 - 873000) |
2000 |
|
Coca-Cola Bond |
2000 |
||
(Being fair value of bond adjusted giants profit and loss account) |
|||
03-01-19 |
Bank |
880000 |
|
Coca-Cola Bond (875000 -2000) |
873000 |
||
Profit and loss account (880000 -873000) |
7000 |
||
(Being the Coca-Cola bond sold and the profit is recognized) |
Brief Exercise 12-5 Available-for-sale securities [LO12-4] S&L Financial buys and sells securities which it classifies as...
S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $892,000 and sold the bonds on January 3, 2019, for $895,500. At December 31, the bonds had a fair value of $889,000, and S&L has the intent and ability to hold the investment until fair value recovers. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2018 and (b) the sale of the bonds...
Brief Exercise 12-5 (Algo) Available-for-sale securities [LO12-4) 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 $892,000 and sold the bonds on January 3, 2022 for $900,000. At December 31, the bonds had a fair value of 5885,000, and S&L has the intent and ability to hold the investment until fair value recovers. Prepare journal entries to record (a) any unrealized gains or losses occurring...
S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $885,000 and sold the bonds on January 3, 2019, for $892,500. At December 31, the bonds had a fair value of $878,000, and S&L has the intent and ability to hold the investment until fair value recovers. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2018 and (b) the sale of the bonds...
Question 1: 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 $883,000 and sold the bonds on January 3, 2022, for $890,000. At December 31, the bonds had a fair value of $877,000, and S&L has the intent and ability to hold the investment until fair value recovers. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2021 and (b) the sale of...
Brief Exercise 12-3 (Algo) Trading securities [LO12-3] S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On December 27, 2021, S&L. purchased Coca-Cola bonds at par for $881,000 and sold the bonds on January 3, 2022 for $887,500. At December 31, the bonds had a fair value of $876,000. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2021 and (b) the sale of the bonds in 2022. (If no...
BE 12-2 Trading securities LO12-30 S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2019, for $880,000. At December 31, the bonds had a fair value of $873,000. What pretax amounts did S&L include in its 2018 and 2019 net income as a result of this investment (ignoring interest)?
S&L Financial buys and sells securities which it classifies as available for sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $775,000 and sold the bonds on January 3, 2019, for $779,500. At December 31, the bonds had a fair value of $771,500, and S&L has the intent and ability to hold the investment until fair value recovers. What pretax amounts did S&L include in its 2018 and 2019 net income as a result of this investment?...
S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On December 27, 2021, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2022, for $880,000. At December 31, the bonds had a fair value of $873,000.Prepare journal entries to record (a) any unrealized gains or losses occurring in 2021 and (b) the sale of the bonds in 2022.(If no entry is required for a transaction/event, select "No journal...
S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On December 27, 2021, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2022, for $880,000. At December 31, the bonds had a fair value of $873,000. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2021 and (b) the sale of the bonds in 2022. (If no entry is required for a transaction/event, select...
please show work! S&L Financial buys and sells securities that it typically classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $965,000 and sold the bonds on January 3, 2019, for $968,500. At December 31, the bonds had a fair value of $960,000. When it purchased the Coca-Cola bonds, S&L Financial decided to elect the fair value option for this investment. What pretax amounts did S&L include in its 2018 and 2019 net income as...