Elaina Company has the following investments as of December 31, 2020: Investments in common stock of Laser Company $1,430,000 Investment in debt securities of FourSquare Company $3,090,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Elaina’s stock investments does not result in significant influence on the operations of Laser Company. Elaina’s debt investment is considered held-to-maturity. At December 31, 2021, the shares in Laser Company are valued at $990,000; the debt investment securities of FourSquare are valued at $2,310,000 and are considered impaired. Prepare the journal entry to record the impairment of the debt securities at December 31, 2021.
Elaina Company has the following investments as of December 31, 2020: Investments in common stock of Laser Company $1,430,000 Investment in debt securities of FourSquare Company $3,090,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Elaina’s stock investments does not result in significant influence on the operations of Laser Company. Elaina’s debt investment is considered held-to-maturity. At December 31, 2021, the shares in Laser Company are valued at $990,000; the debt investment securities of FourSquare are valued at $2,310,000 and are considered impaired. Prepare the journal entry to record the impairment of the debt securities at December 31, 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Elaina Company has the following investments as of December 31, 2020:
| Investments in common stock of Laser Company | $1,430,000 |
| Investment in debt securities of FourSquare Company | $3,090,000 |
In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Elaina’s stock investments does not result in significant influence on the operations of Laser Company. Elaina’s debt investment is considered held-to-maturity. At December 31, 2021, the shares in Laser Company are valued at $990,000; the debt investment securities of FourSquare are valued at $2,310,000 and are considered impaired.
Prepare the
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education