1. On November 1, 2020, a U.S. company invests in debt securities at a cost of...
1. On November 1, 2020, a U.S. company invests in debt securities at a cost of $2,000,000. On December 31, 2020, the securities have a market value of $1,890,000. The securities are sold on February 1, 2021, for $2,005,000.
Required
a. Assume the company classifies the securities as trading securities. Prepare the journal entries on December 31, 2020 and February 1, 2021 to record the above information.
b. Repeat Part a., but this time assume the securities are classified as available-for-sale, and the 2020 decline in value is due to changes in market interest rates.
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payable in three months in pounds. To hedge its exposed asset
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delivery of £8,000,000 to the broker on February 3, 2021. On
February 3, 2021, Robin received payment from the franchisee, and
delivered the pounds to the broker to close...
Available-For-Sale Debt Investment Impairment On January 1,
2020, Argonaut Industries pays $100,000 par value for debt
securities issued by Bally Corporation, and designates them as AFS
securi‐ ties. Following is valuation information on these
securities for December 31, 2020 and 2021. Argonaut does not expect
to sell the securities before recovery of losses at the end of
either year.
P1.2 LO 1 Available-For-Sale Debt Investment Impairment On January 1, 2020, Argonaut Industries pays $100,000 par value for debt securities issued...
At December 31, 2020, the trading debt securities for Storrer, E16.10 (LO 3) Financial Statement Inc. are as follows. Prepare adjo fair value, a presentation Exc Security A B С Cost $17,500 12,500 23,000 $53,000 Fair Value $16,000 14,000 21,000 $51.000 Instructions a. Prepare the adjusting entry at December 31, 2020, to report the securities at fair value. 1. Show the balance sheet and income statement presentation at December 31, 2020, after adjustment to fair value.
Beresford Inc. purchased several investments in debt securities during 2020, its first year of operations. The following information pertains to these securities. The fluctuations in their fair values are not considered permanent Amortired Cost 12/31/2021 $375,000 Amortized Cost 12/31/2020 $380,500 Fair Value 12/31/2021 $413,000 Fair Value 12/31/2020 $388,000 Cost Held-to-Maturity Securities: ABC Co. Bonds $ 74,400 $ 52,000 $ 45,900 Fair Value Fair Value 12/31/2020 12/31/2021 $ 58,000 $ 69,000 $ 60,000 $ 96,300 $ 57,000 $ 51,500 Cost Trading...
Beresford Inc. purchased several investments in debt securities during 2020, its first year of operations. The following information pertains to these securities. The fluctuations in their fair values are not considered permanent. Held-to-Maturity Securities: ABC Co. Bonds Fair Value 12/31/2020 $382,000 Fair Value 12/31/2021 $407,000 Amortized Cost 12/31/2020 $374,500 Amortized Cost 12/31/2021 $367,000 Trading Securities: DEF Co. Bonds GEH Inc. Bonds IJK Inc. Bonds Fair Value 12/31/2020 $ 52,000 $ 54,000 $ 51,000 Fair Value 12/31/2021 $ 63,000 $ 80,000...
Beresford Inc. purchased several investments in debt securities during 2020, its first year of operations. The following information pertains to these securities. The fluctuations in their fair values are not considered permanent. Held-to-Maturity Securities: ABC Co. Bonds Fair Value 12/31/2020 $388,000 Fair Value 12/31/2021 $413,000 Amortized Cost 12/31/2020 $380,500 Amortized cost 12/31/2021 $373,000 Trading Securities: DEF Co. Bonds GEH Inc. Bonds IJK Inc. Bonds Fair Value 12/31/2020 $ 58,000 $ 60,000 $ 57,000 Fair Value 12/31/2021 $ 69,000 $ 96,300...
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