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- At the end of 2018, Terry Company prepared the following schedule of investments in available-for-sale debt securities (all of which were acquired at par value): Company Amortized Cost 12/31/18 Fair Value Cumulative Change in Fair Value Morgan Company $35,000 $34,200 $(800) Nance Company 50,000 53,100 3,100 Totals $85,000 $87,300 $2,300 During 2019, the following transactions occurred: July 1 Purchased Oscar Company debt securities with a par value of 100,000 for $98,000. The securities carry an annual interest rate of 10%, mature on December 31, 2021, and pay interest seminannually on July 1 and December 31. Terry uses the straight-line method to amortize any discounts or premiums. Oct. 11 Sold all of the Morgan Company securities for $33,000 plus interest of $1,300. Dec. 31 Received interest of $6,000 on the Nance Company and Oscar Company debt securities, and the following yearend total market values were available: Nance Company debt securities, $55,000; Oscar…Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2018. 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. Company management has classified the bonds as available-for-sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $210 million. 1. Prepare any journal entry necessary for Tanner-UNF to report its investment in the December 31, 2018, balance sheet. 2. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $190 million. Prepare the journal entries necessary to record the sale, including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale PLEASE SHOW WORK3
- VinubhaiIn its first year of operations, Wildhorse Corporation purchased, available-for-sale debt securities costing $65.000 as a long-term investment. At December 31, 2022, the fair value of the securities is $60,500. Show the financial statement presentation of the securities and related accounts. Assume the securities are noncurrent. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45)) WILDHORSE CORPORATION Balance Sheet 4 $On July 1, Year 1, Hill Inc. bought and classified the following 10-year debt investments as trading securities. At December 31, Year 1, Hill prepares its financial statements for the end of the fiscal year. At December 31, Year 1, Hill determines the fair value of these securities: Security Cost Fair Value AX PH JB $100,000 40,000 82,000 $94,000 64,000 85,000 At what amount will Hill report these investments in its balance sheet at December 31, Year 1, and how will they be classified? Select one: a. $243,000; current assets Ob. $222,000; current assets о c. $222,000; long-term assets d. $140,000; current assets
- Please help with problem. At the beginning of 2019, Ace Company had the following portfolio of investments in available-for-sale debt securities (all of which were acquired at par value): Security Cost 1/1/19 Fair Value A $25,000 $31,000 B 38,000 36,000 Totals $63,000 $67,000 During 2019, the following transactions occurred: Transactions: May 3 Purchased C debt securities at their par value for $50,000. July 1 Sold all of the A securities for $31,000 plus interest of $1,000. Dec. 31 Received interest of $1,000 on the B and C securities. Additionally the following information was available: Security 12/31/19 Fair Value B $42,000 C 53,000 Required: 1. Prepare journal entries to record the preceding information. 2. What is the balance in the Unrealized Holding Gain/Loss account on December 31, 2019? 3. Next Level What justification does the FASB give for its treatment of unrealized holding gains and losses…An investor company purchased 17,000 of the 50,000 outstanding shares of the investee company's common stock for $338,000 on January 1, 2021. During 2021, the investee company declared dividends of $33,000 and reported earnings for the year of $158,000. If the investor company uses the equity method of accounting for its investment in the investee company, it should report Dividend Revenue from the investee for 2021 in the amount of $_______. (If there is no Dividend Revenue, then enter 0. Do not round your answer for any part of the computation.)Penta Company purchased 1,000 bonds of Gone Company in 2018 for $810 per bond and classified the investment as securities available-for-sale. The value of these holdings was $272 per bond on December 31, 2019, and $421 per bond on December 31, 2020. During 2021, Penta sold all of its Gone bonds at $390 per bond. In its 2021 income statement, Penta would report: 53 Multiple Choice A trading gain of $31,000 and an unrealized holding loss of $390,00. A loss on the sale of investments of $420,000. A realized gain of $31,00O. A recognition of unrealized holding losses of $272,00o. 7 of 16 Next >Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated's investment activities during the last quarter of 2021 and the first month of 2022. The only securities held by Amalgamated at October 1, 2021 were $38 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1, 2021 at face value and held in Amalgamated's trading securities portfolio. The company's fiscal year ends on December 31. 2021 Oct. 18 Purchased 2 million shares of Millwork Ventures Company common stock for $60 million. Millwork has a total of 38 million shares issued. 31 Received semiannual interest of $1.9 million from the Kansas Abstractors bonds. Nov. 1 Purchased 10% bonds of Holistic Entertainment Enterprises at their $18 million face value, to be held until they mature in 2031. Semiannual interest is payable April 30 and October…On January 1, 2020, Windsor Company purchased 6,100 shares of Kusher Company stock for $439,200. Windsor's investment represents 30 percent of the total outstanding shares of Kusher. During 2020, Kusher paid total dividends of $152,000 and reported net income of $456,000. What revenue does Windsor report related to this investment and what is the amount to be reported as an investment in Kusher stock at December 31? Revenue $ Investment in Kusher stock at December 31 $Company X purchased trading securities in February. Company Y purchased available-for-sale securities in February as well, and it plans to sell them before December. Company Z purchased available-for-sale securities and is planning to hold onto them for at least two years. What is implied here? 1. Company X and Company Y will report their securities under current assets on the balance sheet, while Company Z will report their securities immediately below current assets in the investments section. 2. Company X will report their securities under current assets on the balance sheet, while Company Y and Company Z will report their securities immediately under current assets in the investments section. 3. Company X and Company Y will report their securities under current assets, while Company Z will report their securities under current liabilities. 4. Company X, Y, and Z will all report their securities under current assets on the balance sheet.SEE MORE QUESTIONS