Classify the following investments. Each case is independent of the other. Investment Classifications(a) A bond that will mature in 4 years was bought 1 month ago when the price dropped. As soon as the value increases, which is expected next month, it will be sold. select an Investment Classification *Available-for-Sale Debt Securities*Held-to-Maturity Debt Securities*Trading Debt Securities*None of the above(b) 10% of the outstanding stock of Farm-Co was purchased. The company is planning on eventually getting a total of 30% of its outstanding stock. select an Investment Classification *Available-for-Sale Debt Securities *Held-to-Maturity Debt Securities *Trading Debt Securities *None of the above(c) Bonds were purchased in December of this year. The bonds are expected to be sold in January of next year. select an Investment Classification *Available-for-Sale Debt Securities*Held-to-Maturity Debt Securities*Trading Debt Securities*None of the above(d) Bonds that will mature in 5 years are purchased. The company would like to hold them until they mature, but money has been tight recently and they may need to be sold. select an Investment Classification *Available-for-Sale Debt Securities*Held-to-Maturity Debt Securities*Trading Debt Securities*None of the above(e) Preferred stock was purchased for its constant dividend. The company is planning to hold the preferred stock for a long time. select an Investment Classification *Available-for-Sale Debt Securities*Held-to-Maturity Debt Securities*Trading Debt Securities*None of the above(f) A bond that matures in 10 years was purchased. The company has committed the money for an expansion project planned 10 years from now. select an Investment Classification *Available-for-Sale Debt Securities*Held-to-Maturity Debt Securities*Trading Debt Securities*None of the above

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Answered: Classify the following investments.…

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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Classify the following investments. Each case is independent of the other.

		Investment Classifications
(a) A bond that will mature in 4 years was bought 1 month ago when the price dropped. As soon as the value increases, which is expected next month, it will be sold.		select an Investment Classification Available-for-Sale Debt Securities Held-to-Maturity Debt Securities Trading Debt Securities None of the above
(b) 10% of the outstanding stock of Farm-Co was purchased. The company is planning on eventually getting a total of 30% of its outstanding stock.		select an Investment Classification Available-for-Sale Debt Securities Held-to-Maturity Debt Securities Trading Debt Securities None of the above
(c) Bonds were purchased in December of this year. The bonds are expected to be sold in January of next year.		select an Investment Classification Available-for-Sale Debt Securities Held-to-Maturity Debt Securities Trading Debt Securities None of the above
(d) Bonds that will mature in 5 years are purchased. The company would like to hold them until they mature, but money has been tight recently and they may need to be sold.		select an Investment Classification Available-for-Sale Debt Securities Held-to-Maturity Debt Securities Trading Debt Securities None of the above
(e) Preferred stock was purchased for its constant dividend. The company is planning to hold the preferred stock for a long time.		select an Investment Classification Available-for-Sale Debt Securities Held-to-Maturity Debt Securities Trading Debt Securities None of the above
(f) A bond that matures in 10 years was purchased. The company has committed the money for an expansion project planned 10 years from now.		select an Investment Classification Available-for-Sale Debt Securities Held-to-Maturity Debt Securities Trading Debt Securities None of the above

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