000 502,000 41,000 Totals $ 963,000 $ 896,000 $ (67,000) Long term:
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Loreal-American Corporation purchased several marketable securities during 2024. At December 31, 2024, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2023, and all are considered securities available-for-sale.
| Cost | Fair Value | Unrealized Holding Gain (Loss) | |
|---|---|---|---|
| Short term: | |||
| Blair, Incorporated | $ 502,000 | $ 394,000 | $ (108,000) |
| ANC Corporation | 461,000 | 502,000 | 41,000 |
| Totals | $ 963,000 | $ 896,000 | $ (67,000) |
| Long term: | |||
| Drake Corporation | $ 502,000 | $ 571,000 | $ 69,000 |
| Aaron Industries | 709,000 | 671,000 | (38,000) |
| Totals | $ 1,211,000 | $ 1,242,000 | $ 31,000 |
Required:
Prepare appropriate
What amount would be reported in the income statement at December 31, 2024, as a result of the adjusting entry?
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- Tanner-UNF Corporation acquired as a long-term investment $180 million of 7.0% bonds, dated July 1, on July 1, 2024. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 9% for bonds of similar risk and maturity. Tanner-UNF paid $160.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2024, was $160.0 million. Required: 1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2024 and interest on December 31, 2024, a the effective (market) rate. 3. At what amount will Tanner-UNF report its investment in the December 31, 2024, balance sheet? 4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2025, for $130.0 million. Prepare the journal entry to record the sale.…Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2024. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2024, was $210 million. Required: 1. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2025, for $190 million. Prepare the journal entry to record the sale.Loreal-American Corporation purchased several marketable securities during 2021. At December 31, 2021, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2020, and all are considered securities available-for-sale. Unrealized Holding Gain (Loss) Cost Fair Value Short term: Blair, Inc. ANC Corporation $ 484,000 452,000 $ 403,000 484,000 $(81,000) 32,000 Totals $ 936,000 $ 887,000 $(49,000) Long term: Drake Corporation $ 484,000 718,000 $ 562,000 $ 78,000 (56,000) $ 22,000 Aaron Industries 662,000 Totals $1,202,000 $1,224,000 Required: 1. Prepare appropriate adjusting entries at December 31, 2021. 2. What amount would be reported in the income statement at December 31, 2021, as a result of the adjusting entry? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What amount would be reported in the income statement at December 31, 2021, as a result of…
- Kenseth Company has the following securities in its portfolio on December 31, 2020. None of these investments are accounted for under the equity method. Investments Cost Fair Value 1,500 shares of Gordon, Inc., common $ 73,500 $ 69,000 5,000 shares of Wallace Corp., common 180,000 175,000 400 shares of Martin, Inc., preferred 60,000 61,600 $313,500 $305,600 All of the securities were purchased in 2020. In 2021, Kenseth completed the following securities transactions. March 1 Sold the 1,500 shares of Gordon, Inc., common, @ $45 less fees of $1,200. April 1 Bought 700 shares of Earnhart Corp., common, @ $75 plus fees of $1,300. Kenseth's portfolio of equity securities appeared as follows on December 31, 2021. Investments Cost Fair Value 5,000 shares of Wallace Corp., common $180,000 $175,000 700 shares of Earnhart Corp., common 53,800 50,400 400 shares of Martin, Inc., preferred 60,000 58,000…Tanner-UNF Corporation acquired as a long-term investment $200 million of 6% bonds, dated July 1, 2024. Assume Tanner-UNF management is holding the bonds in a trading portfolio. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2024, was $210 million. Required: 1. to 3. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2024, interest on December 31, 2024, at the effective (market) rate and the fair value adjustment at December 31. 4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motiving Tanner-UNF to sell the investment on January 2, 2025, for $190 million. Prepare the journal entry to record the sale. Comple this question by entering your wers in the tabs below. Req 1 to 3 Suppose Moody's bond rating agency downgraded the risk rating of the bonds motiving Tanner-UNF to…Mills Corporation acquired as a long-term investment $250 million of 8% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Mills paid $290.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $270.0 million. Required: 1. & 2. Prepare the journal entry to record Mills' investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate. 3. At what amount will Mills report its investment in the December 31, 2021, balance sheet? 4. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, for $300 million. Prepare the journal entry to record the sale.
- Loreal-American Corporation purchased several marketable securities during 2024. At December 31, 2024, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2023, and all are considered securities available-for-sale. Short term: Blair, Incorporated ANC Corporation Totals Long term: Drake Corporation Aaron Industries Totals Required 1 Required 2 Cost $ 516,000 468,000 $984,000 View transaction list Fair Value 1 " $ 387,000 516,000 $ 903,000 $ 516,000 702,000 $ 578,000 678,000 $ 1,218,000 $ 1,256,000 Journal entry worksheet Required: 1. Prepare appropriate adjusting entry at December 31, 2024. 2. What amount would be reported in the income statement at December 31, 2024, as a result of the adjusting entry? Complete this question by entering your answers in the tabs below. Unrealized Holding Gain (Loss) $ (129,000) 48,000 $ (81,000) Prepare appropriate adjusting entry at December 31, 2024. Note: If no entry is required for a…es Tanner-UNF Corporation acquired as a long-term Investment $170 million of 6% bonds, dated July 1, on July 1, 2024. Company management has the positive Intent and ability to hold the bonds until maturity, but when the bonds were acquired, Tanner-UNF decided to elect the fair value option for accounting for Its Investment. The market Interest rate (yleld) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $140 million for the bonds. The company will receive Interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2024, was $150 million. Required: 1. How would this Investment be classified on Tanner-UNF's balance sheet? 2. to 4. Prepare the journal entry to record Tanner-UNF's Investment in the bonds on July 1, 2024, Interest on December 31, 2024, at the effective (market) rate, and fair value changes as of December 31, 2024. 5. At what amount will Tanner-UNF report Its Investment in the…The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2024. The company buys debt securities, intending to profit from short-term differences in price and maintaining them in an active trading portfolio. Ornamental's fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2023. March 31 Acquired 8% Distribution Transformers Corporation bonds costing $520,000 at face value. September 1 Acquired $1,260,000 of American Instruments' 10% bonds at face value. September 30 Received semiannual interest payment on the Distribution Transformers bonds. October 2 Sold the Distribution Transformers bonds for $550,000. November 1 Purchased $2,000,000 of M&D Corporation 6% bonds at face value. December 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are American Instruments bonds M&D Corporation bonds (Hint: Interest must be accrued.) Required: 1.…
- The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys debt securities, intending to profit from short-term differences in price and maintaining them in an active trading portfolio. Ornamental’s fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020. Mar. 31 Acquired 8% Distribution Transformers Corporation bonds costing $560,000 at face value. Sep. 1 Acquired $1,380,000 of American Instruments' 10% bonds at face value. Sep. 30 Received semiannual interest payment on the Distribution Transformers bonds. Oct. 2 Sold the Distribution Transformers bonds for $610,000. Nov. 1 Purchased $2,200,000 of M&D Corporation 6% bonds at face value. Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are American Instruments bonds $ 1,336,000 M&D…The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys debt securities, not intending to profit from short-term differences in price and not necessarily to hold debt securities to maturity, but to have them available for sale in years when circumstances warrant. Ornamental’s fiscal year ends on December 31 No investments were held by Ornamental on December 31, 2020. Mar. 31 Acquired 8% Distribution Transformers Corporation bonds costing $480,000 at face value. Sep. 1 Acquired $1,020,000 of American Instruments’ 10% bonds at face value. Sep. 30 Received semiannual interest payment on the Distribution Transformers bonds. Oct. 2 sold the Distribution Transformers bonds for $513,000. Nov. 1 Purchase $1,480,000 of M&D Corporation 6% bonds at face value. Dec. 31 Recorded any necessary adjusting entry (s) relating to the investments. The market prices of the investments are American Instruments bonds…The following information is available for Sheridan Company at December 31, 2025, regarding its investments. Securities Cost Fair Value 2,400 shares of Myers Corporation common stock $40,200 $48,200 900 shares of Cole Incorporated preferred stock 24,500 21,600 $64,700 $69,800 Prepare the adjusting entry (if any) for 2025, assuming no balance in the Fair Value Adjustment account at January 1, 2025. Neither of Sheridan's investments result in significant influence. Assume the securities as trading securities. (List debit entry before credit entry. 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 O for the amounts.)
