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Corporation owns $1,300,000 of Branch Pharmaceuticals bonds and classifies its investment as securities held-to-maturity. The ket price of Branch's bonds fell by $481,000 due to concerns about one of the company's principal drugs. The concerns were fied when the FDA banned the drug. LED views $200,000 of the $481,000 loss as related to credit losses, and the other $281,00 oncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers. t journal entries should LED record to account for any credit or noncredit losses in the current period? How should the decline et net income and comprehensive income? omplete this question by entering your answers in the tabs below. General Journal Effect w should the decline affect net income and comprehensive income? te: Negative amounts should be entered with minus sign. income er comprehensive income effect on comprehensive income Effect $ (200,000) $ (281,000) $ (481,000) < General Journal Effect >

Corporation owns $1,300,000 of Branch Pharmaceuticals bonds and classifies its investment as securities held-to-maturity. The ket price of Branch's bonds fell by $481,000 due to concerns about one of the company's principal drugs. The concerns were fied when the FDA banned the drug. LED views $200,000 of the $481,000 loss as related to credit losses, and the other $281,00 oncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers. t journal entries should LED record to account for any credit or noncredit losses in the current period? How should the decline et net income and comprehensive income? omplete this question by entering your answers in the tabs below. General Journal Effect w should the decline affect net income and comprehensive income? te: Negative amounts should be entered with minus sign. income er comprehensive income effect on comprehensive income Effect $ (200,000) $ (281,000) $ (481,000) < General Journal Effect >

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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LED Corporation owns $1,300,000 of Branch Pharmaceuticals bonds and classifies its investment as securities held-to-maturity. The market price of Branch's bonds fell by $481,000 due to concerns about one of the company's principal drugs. The concerns were justified when the FDA banned the drug. LED views $200,000 of the $481,000 loss as related to credit losses, and the other $281,000 as noncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers. What journal entries should LED record to account for any credit or noncredit losses in the current period? How should the decline affect net income and comprehensive income? Complete this question by entering your answers in the tabs below. General Journal Effect How should the decline affect net income and comprehensive income? Note: Negative amounts should be entered with minus sign. Net income Other comprehensive income Net effect on comprehensive income Effect $ (200,000) $ (281,000) (481,000) < General Journal Effect >
Transcribed Image Text:LED Corporation owns $1,300,000 of Branch Pharmaceuticals bonds and classifies its investment as securities held-to-maturity. The market price of Branch's bonds fell by $481,000 due to concerns about one of the company's principal drugs. The concerns were justified when the FDA banned the drug. LED views $200,000 of the $481,000 loss as related to credit losses, and the other $281,000 as noncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers. What journal entries should LED record to account for any credit or noncredit losses in the current period? How should the decline affect net income and comprehensive income? Complete this question by entering your answers in the tabs below. General Journal Effect How should the decline affect net income and comprehensive income? Note: Negative amounts should be entered with minus sign. Net income Other comprehensive income Net effect on comprehensive income Effect $ (200,000) $ (281,000) (481,000) < General Journal Effect >
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According to the question feedback whether its right or wrong. Net income above was correct. Other comp income is 0 however and correct. Net effect on comprehensive income is not (681,000) as the feedback marked it as wrong. 

LED Corporation owns $1,300,000 of Branch Pharmaceuticals bonds and classifies its investment as securities held-to- maturity. The market price of Branch's bonds fell by $481,000 due to concerns about one of the company's principal drugs. The concerns were justified when the FDA banned the drug. LED views $200,000 of the $481,000 loss as related to credit losses, and the other $281,000 as noncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers. What journal entries should LED record to account for any credit or noncredit losses in the current period? How should the decline affect net income and comprehensive income? Complete this question by entering your answers in the tabs below. General Journal Effect Answer is complete but not entirely correct. How should the decline affect net income and comprehensive income? Note: Negative amounts should be entered with minus sign. Net income Other comprehensive income Net effect on comprehensive income Effect $ (200,000) $ $ 681,000 0
Transcribed Image Text:LED Corporation owns $1,300,000 of Branch Pharmaceuticals bonds and classifies its investment as securities held-to- maturity. The market price of Branch's bonds fell by $481,000 due to concerns about one of the company's principal drugs. The concerns were justified when the FDA banned the drug. LED views $200,000 of the $481,000 loss as related to credit losses, and the other $281,000 as noncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers. What journal entries should LED record to account for any credit or noncredit losses in the current period? How should the decline affect net income and comprehensive income? Complete this question by entering your answers in the tabs below. General Journal Effect Answer is complete but not entirely correct. How should the decline affect net income and comprehensive income? Note: Negative amounts should be entered with minus sign. Net income Other comprehensive income Net effect on comprehensive income Effect $ (200,000) $ $ 681,000 0
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