ased 1,000 Diamond Corporation bonds in 2018 for $500 per bond and classified the investment as securities available-for-sale. The value of the Diamond investment was $600 per bond on December 31, 2019, and $650 per bond on December 31, 2020. During 2021, CSUN sold all of its Diamond investment at $700 per bond. If CSUN records unrealized holding gains and losses up to the moment of sale, what would be the amount of reclassification adjustment that

ased 1,000 Diamond Corporation bonds in 2018 for $500 per bond and classified the investment as securities available-for-sale. The value of the Diamond investment was $600 per bond on December 31, 2019, and $650 per bond on December 31, 2020. During 2021, CSUN sold all of its Diamond investment at $700 per bond. If CSUN records unrealized holding gains and losses up to the moment of sale, what would be the amount of reclassification adjustment that

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1RE

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Refer to the information in RE13-5. Assume that on December 31, 2019, the investment in Smith Corporation bonds has a market value of 12,500. Prepare the year-end journal entry to record the unrealized gain or loss.
For several years Fister Links Products has held Microsoft bonds, considered by the company to be securities available-for-sale. The bonds were acquired at a cost of $500,000. At the end of 2018, their fair value was$610,000 and their amortized cost was $510,000. At the end of 2019, their fair value was $600,000 and theiramortized cost was $520,000. At what amount will the investment be reported in the December 31, 2019, balance sheet? What adjusting entry is required to accomplish this objective (ignore interest)?
On February 1, 2020, Aggie Corporation sold its investment in Smith Corporation bonds for $12,500. The bonds have a face value of $12,000 and a stated interest rate of 10%. The market value of the bonds on December 31, 2019 was $12,300. Prepare the journal entries to record the sale of the bonds and the adjustments of the unrealized gain or loss.
On January 1, 2019, ZZZ Company purchased bonds with face amount of P5,000000. The entity paid P4,500,000 plus transaction costs of P168,600. The bonds mature on December 31, 2022 and pay 6% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2019 and 110 on December 31, 2020. The business model in managing the financial asset is to collect contractual cash flows and also to sell the bonds in the open market. The entity has not elected the fair value option. On December 31, 2020, the entity changed the business model to collect only contractual cash flows. On December 31, 2021, the bonds are quoted at 115 and the market rate of interest is 10%.what amount should be reported as interest income for 2021?
Adam Corporation purchased 1,000 bonds of Quick Corporation in 2018 for $800 per bond and classified it as available for sale. The value of the holding was $400 per bond on December 31, 2019, and $300 per bond on December 31, 2020. In 2021, Adam sold all its Quick bonds at $350 per bond. What would the amount record be upon sale?a) A debit of $500,000b) A credit of $500,000c) A debit of $450,000d) A credit of $450,000
On January 1, 2019, ZZZ Company purchased bonds with face amount of P5,000000. The entity paid P4,500,000 plus transaction costs of P168,600. The bonds mature on December 31, 2022 and pay 6% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2019 and 110 on December 31, 2020. The business model in managing the financial asset is to collect contractual cash flows and also to sell the bonds in the open market. The entity has not elected the fair value option. On December 31, 2020, the entity changed the business model to collect only contractual cash flows. On December 31, 2021, the bonds are quoted at 115 and the market rate of interest is 10%. What mount of cumulative unrealized gain should be reported as component of OCI in the statement of changes in equity for 2020?
On January 1, 2019, ZZZ Company purchased bonds with face amount of P5,000000. The entity paid P4,500,000 plus transaction costs of P168,600. The bonds mature on December 31, 2022 and pay 6% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2019 and 110 on December 31, 2020. The business model in managing the financial asset is to collect contractual cash flows and also to sell the bonds in the open market. The entity has not elected the fair value option. On December 31, 2020, the entity changed the business model to collect only contractual cash flows. On December 31, 2021, the bonds are quoted at 115 and the market rate of interest is 10%. What is the carrying amount of the investment on December 31, 2021?
On February 18, 2018, Union Corporation purchased $1,139,000 of IBM bonds. Union will hold the bonds indefinitely, and may sell them if their increases sufficiently. On December 31, 2018, and December 31, 2019, the market value of the bonds was $1,105,000 and $1,156,000, respectfully. Prepare the adjusting entry for December 31, 2018 and 2019. The answer they have is: Dec 31,2018 Unrealized holding gain 34,000 Fair value adjustment 34,000 Dec 31,2019 Fair value adjustment 51,000 Unrealized holding gain 51,000 Please show me the calculation steps for the answer: $51,000. How do you get this number?
Goofy Inc. bought a sizeable amount of Crazy Co.'s bonds for $205,000 on May 5, 2020, and classified the investment as available-for-sale. The market value of the bonds declined to $129,000 by December 31, 2020. Goofy reclassified this investment as trading securities in December of 2021 when the market value had risen to $163,000. What effect on 2021 net income should be reported by Goofy for the Crazy Co. bonds? $34,000 net unrealized holding gain. $76,000 net unrealized holding loss. $0. $42,000 net unrealized holding loss.
On January 1, 2018, an entity purchased bonds with face amount of P5,000,000. The entity paid P4,500,000 plus transaction cost of P168,600. The bonds mature on December 31, 2020 and pay 6% interest annually on December 31 of each year with 8% effective yield. The bonds were quoted at 105 on December 31, 2018 and 110 on December 31, 2019.The business model in managing the financial asset is to collect contractual cash flows that are solely payments of principal and interest and also to sell the bonds in the open market. The entity has not elected the fair value option. On December 31, 2019, the entity changed its business model to collect only contractual cash flows. On December 31, 2020, the bonds are quoted at 115 and the market interest rate is 10%. find the following: 1. What amount of unrealized gain should be reported as component of OCI in the statement of comprehensive income for 2018? 2. What amount of unrealized gain should be reported as component of OCI in the statement of…
Surface Company purchased 1,000 bonds of Slick Company in 2018 for $760 per bond and classified the investment as securities available-for-sale. The value of these holdings was $260 per bond on December 31, 2019, and $444 per bond on December 31, 2020. During 2021, Surface sold all of its Slick bonds at $380 per bond. In its 2021 income statement, Surface would report: Multiple Choice A trading gain of $64,000 and an unrealized holding loss of $380,000. A loss on the sale of investments of $380,000. A recognition of unrealized holding losses of $260,000. A realized gain of $64,000.
In 2021, Cromwell Corporation purchased bonds of Oliver Company at par for $300,000 and classified the investment as available-for-sale. In 2022, the market value increased to $320,000. In 2023, the market value of the investment declined to $310,000, and the investment was sold for $310,000. Question Journal entries for 2023 would include: Debit to Bond Investment - AFS of $300,000 Debit to Fair Value Adjustment - AFS of $20,000 Debit to Gain on Sale of Bond Investment - AFS of $10,000 Debit to Unrealized Holding Gains and Losses - OCI for $20,000