At December 31, 2017, Gregson Inc. has these data on its security investments: Security Cost Fair Value 12/31/17 Trading $ 280,000 $344,000 250,000 Non-trading 274,000 If the non-trading securities are held as long-term investments, which of the following will be recorded to adjust the securities to fair value? O a. Fair Value Adjustment-Trading... 64,000 Unrealized Gain-Income. 64,000 Unrealized Gain or Loss-Equity.. 24,000 Fair Value Adjustment-Non-Trading. 24,000 24,000 Unrealized Gain-Income.. Ob. Unrealized Loss-Income. Securities. Oc. Securities d. Unrealized Gain-Income Unrealized Gain-Income.. ..40,000 40,000 4,000 ..28,000 64.000

At December 31, 2017, Gregson Inc. has these data on its security investments: Security Cost Fair Value 12/31/17 Trading $ 280,000 $344,000 250,000 Non-trading 274,000 If the non-trading securities are held as long-term investments, which of the following will be recorded to adjust the securities to fair value? O a. Fair Value Adjustment-Trading... 64,000 Unrealized Gain-Income. 64,000 Unrealized Gain or Loss-Equity.. 24,000 Fair Value Adjustment-Non-Trading. 24,000 24,000 Unrealized Gain-Income.. Ob. Unrealized Loss-Income. Securities. Oc. Securities d. Unrealized Gain-Income Unrealized Gain-Income.. ..40,000 40,000 4,000 ..28,000 64.000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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• The following information is available for Alpha's investments: Fair Value Market Original Adjustment Value Investment Cost 12/31/2020 Classification 12/31/2021 Available for Beta bonds $80,000 $6,000 dr. $78,000 Sale Gamma bonds $60,000 $4,000 cr. Trading $66,000 The journal entries on 12/31/21 for Beta will include: O Debit to Unrealized Loss - OCI for $8,000 O Debit to Unrealized Loss - NI for $2,000 O Debit to Unrealized Loss - NI for $6,000 O Debit to Unrealized Loss - NI for $8,000
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Tanner-UNF Corporation acquired as a long-term investment $290 million of 8% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $260 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 million. Required: 1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate. 3. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2021, 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, 2022, for $250 million. Prepare the journal entries…
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