BE14 - 14 Shonen Knife Corporation has elected to use the fair value option for one of its notes payable. The note was issued at an effective rate of 11% and has a carrying value of $16, 000. At year-end, Shonen Knife's borrowing rate (credit risk) has declined; the fair value of the note payable is now $17,500. (a) Determine the unrealized holding gain or loss' on the note. (b) Prepare the entry to record any unrealized holding gain or loss

BE14 - 14 Shonen Knife Corporation has elected to use the fair value option for one of its notes payable. The note was issued at an effective rate of 11% and has a carrying value of $16, 000. At year-end, Shonen Knife's borrowing rate (credit risk) has declined; the fair value of the note payable is now $17,500. (a) Determine the unrealized holding gain or loss' on the note. (b) Prepare the entry to record any unrealized holding gain or loss

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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Question

BE14 - 14 Shonen Knife Corporation has elected to use the fair value option for
one of its notes payable. The note was issued at an effective rate of 11% and has
a carrying value of $16,000. At year-end, Shonen Knife's borrowing rate (credit
risk) has declined; the fair value of the note payable is now $17,500. (a)
Determine the unrealized holding gain or loss' on the note. (b) Prepare the entry
to record any unrealized holding gain or loss

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