At December 31, 2027, available-for-sale debt securities for Sunland, Inc. are as follows. The securities are considered to be a long-term investment.SecurityABCCostFair Value$17,200$16,50012,00013,70023,50019,000$52,700$49,200 Show the statement presentation at December 31, 2027, after adjustment to fair value. (Enter negative amounts usingnegative sign preceding the number e.g. -45 or parentheses e.g. (45).)Sunland, Inc.Balance Sheet (Partial)>>SA>SASunland, Inc.Comprehensive Income Statement>$SAAccounting5月7QueingEstvA田

Part 2: Explanation:Step 1: Determine the fair value adjustment for each security.- For Security A:…

Answered: At December 31, 2027,…

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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Required information [The following information applies to the questions displayed below.] Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale Securities Company A bonds Fair Value $ 495,000 Company B notes Cost $530,500 159,080 663,000 Company C bonds 147,000 648,390 Stoll enters into the following transactions involving its available-for-sale debt securities this year. Sold one-half of the Company B notes for $78,170. Purchased Company X bonds for $127,000. January 29 July 6 November 13 Purchased Company Z notes for $267,500. December 9 Sold all of the Company A bonds for $517,400. Fair values at December 31 are B, $80,600; C, $600,800; X, $120,000; and Z, $279,000. Required: 1. Prepare journal entries to record these transactions, including the December 31 adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities. 2. Determine the amount Stoll reports…
On January 1, 2026, Baker Company purchased, as an investment, 5% bonds, having a maturity value of $150,000, for $138,400. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2026, and mature January 1, 2036, with interest receivable June 30 and December 31 of each year. The securities are classified as available-for-sale. January 1, 2026 June 30, 2026 December 31, 2026 June 30, 2027 December 31, 2027 June 30, 2028 December 31, 2028 Schedule of Interest Revenue and Bond Amortization Amortization Cash Received (2.5%) Interest Revenue (3.5%) 3,750 3,750 3,750 3,750 3,750 3,750 4,844 4,882 4,922 4,963 5,005 5,049 The fair value of the bonds at December 31 of each year-end is as follows. 2026 145,000 2027 148,000 2028 152,000 1,094 1,132 1,172 1,213 1,255 1,299 Carrying Value 138,400 139,494 140,626 141,798 143,011 144,266 145,565 a) Prepare the journal entry at the date of the investment purchase. b) Prepare the journal entries to record the interest received on…
What is the interest income on the bond investment for the year 2022? What is the carrying amount of the bond investment on December 31, 2022?
A8
At December 31, 2020, the available-for-sale debt portfolio for Windsor, Inc. is as follows. Security Cost Fair Value UnrealizedGain (Loss) A $27,125 $23,250 $(3,875 ) B 19,375 21,700 2,325 C 35,650 39,525 3,875 Total $82,150 $84,475 2,325 Previous fair value adjustment balance—Dr. 620 Fair value adjustment—Dr. $1,705 On January 20, 2021, Windsor, Inc. sold security A for $23,405. The sale proceeds are net of brokerage fees. 1). Prepare the adjusting entry at December 31, 2020, to report the portfolio at fair value. 2). Show the balance sheet presentation of the investment-related accounts at December 31, 2020
P16.1 (LO 1) (Debt Securities) Presented below is an amortization schedule related to Spangler Company's 5-year, $100,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2023, for $108,660. Date Cash Received 12/31/23 12/31/24 $7,000 12/31/25 7,000 12/31/26 7,000 12/31/27 12/31/28 7,000 7,000 Interest Revenue $5,433 5,354 5,272 5,186 5,095 Bond Premium Amortization The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end. Instructions Amortized cost Fair value 12/31/24 $107,093 106,500 12/31/25 $105,447 107,500 $1,567 1,646 1,728 1,814 1,905 Carrying Amount of Bonds $108,660 107,093 105,447 103,719 101,905 100,000 12/31/26 $103,719 105,650 12/31/27 $101,905 103,000 a. Prepare the journal entry to record the purchase of these bonds on December 31, 2023, assuming the bonds are classified as held-to-maturity securities. b. Prepare the journal entry (entries) related to the held-to-maturity bonds for 2024. c. Prepare…
On December 31, 2018, Marsh Company held Xenon Company bonds in its portfolio of available-for-sale securities. The bonds have a par value of $14,000, carry a 10% annual interest rate, mature in 2025, and had originally been purchased at par. The market value of the bonds at December 31, 2018 was $12,000. The December 31, 2018, balance sheet showed the following: Marsh Company Partial Balance Sheet December 31, 2018 1 Assets 2 Investment in Available-for-Sale Securities $14,000.00 3 Less: Allowance for Change in Fair Value of Investment (2,000.00) 4 $12,000.00 5 Shareholders’ Equity: 6 Unrealized Holding Gain/Loss $(2,000.00) On January 1, 2019, Marsh acquired bonds of Yellow Company with a par value of $16,000 for $16,200. The Yellow Company bonds carry an annual interest rate of 12% and mature on December 31, 2023. Additionally, Marsh acquired Zebra Company bonds with a face value of 19,000 for…
Ee.105.
At December 31, 2024, Hull-Meyers Corporation had the following Investments that were purchased during 2024, its first year of operations: Trading Securities: Security A Security B Totals Securities Available-for-Sale: Security C Security D Totals Securities to Be Held-to-Maturity: Security E Security F Totals Trading Securities Security A Security B Securities Available-for-Sale Security C Security D Securities to be Held-to-Maturity Security E Security F Required: Complete the following table. Note: Amounts to be deducted should be indicated with a minus sign. Totals Amortized cost Reported on Balance Sheet as: No Investments were sold during 2024. All securities except Security D and Security F are considered short-term Investments. None of the fair value changes is considered permanent. Current assets Noncurrent assets $ 0 $ $ 965,000 170,000 $ 1,135,000 $ 765,000 965,000 $ 1,730,000 0 $ 555,000 680,000 $ 1,235,000 Net Income $ Fair Value $ 979,500 164, 600 $ 1,144,100 0 $ 838,500…

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