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E17.23 (LO 4) (Impairment) Elaina Ce investment as of December 31, 2022: Investment in debt securities of FourSq The carrying value and the fair value of th at December 31, 2022. Elaina's debt inves

E17.23 (LO 4) (Impairment) Elaina Ce investment as of December 31, 2022: Investment in debt securities of FourSq The carrying value and the fair value of th at December 31, 2022. Elaina's debt inves

FINANCIAL ACCOUNTING
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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E17-23. Please answer part d. 

E17.23 (LO 4) (Impairment) Elaina Company has the following investment as of December 31, 2022: Investment in debt securities of FourSquare Company $3,300,000| The carrying value and the fair value of the investment are the same at December 31, 2022. Elaina's debt investment is considered held- for-collection. At December 31, 2023, the debt investment securities of FourSquare are valued at $2,500,000. Assume that these investments are considered impaired. Instructions a. Prepare the journal entries to record the impairment of these securities at December 31, 2023. b. Assuming the fair value of its debt investment is $2,950,000, what entries, if any, should be recorded in 2024 related to impairment? c. Prepare the journal entries at December 31, 2024, assuming these securities are not impaired. (Ignore interest revenue entries.) d. Assume that the debt investment in FourSquare Company was held-for-collection and selling and the expected credit loss was $250,000. Prepare the journal entry to record this impairment on December 31, 2023.
Transcribed Image Text:E17.23 (LO 4) (Impairment) Elaina Company has the following investment as of December 31, 2022: Investment in debt securities of FourSquare Company $3,300,000| The carrying value and the fair value of the investment are the same at December 31, 2022. Elaina's debt investment is considered held- for-collection. At December 31, 2023, the debt investment securities of FourSquare are valued at $2,500,000. Assume that these investments are considered impaired. Instructions a. Prepare the journal entries to record the impairment of these securities at December 31, 2023. b. Assuming the fair value of its debt investment is $2,950,000, what entries, if any, should be recorded in 2024 related to impairment? c. Prepare the journal entries at December 31, 2024, assuming these securities are not impaired. (Ignore interest revenue entries.) d. Assume that the debt investment in FourSquare Company was held-for-collection and selling and the expected credit loss was $250,000. Prepare the journal entry to record this impairment on December 31, 2023.
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