In 2019, Osgood Corporation purchased $8.5 million worth of 10-year municipal bonds at face value. On December 31, 2021, the bonds had a fair value of $2,800,000 and Osgood reclassified the bonds from held-to-maturity to trading securities. Osgood's December 31, 2021, balance sheet and the 2021 income statement would show the following: Investment in bonds (TS) Income statement loss on investments a. $ 2,800,000 $ 0 b. $ 2,800,000 $ 5,700,000 c. $ 8,500,000 $ 5,700,000 d. $ 8,500,000 $ 0 Option b. Option d. Option c. Option a.
In 2019, Osgood Corporation purchased $8.5 million worth of 10-year municipal bonds at face value. On December 31, 2021, the bonds had a fair value of $2,800,000 and Osgood reclassified the bonds from held-to-maturity to trading securities. Osgood's December 31, 2021, balance sheet and the 2021 income statement would show the following: Investment in bonds (TS) Income statement loss on investments a. $ 2,800,000 $ 0 b. $ 2,800,000 $ 5,700,000 c. $ 8,500,000 $ 5,700,000 d. $ 8,500,000 $ 0 Option b. Option d. Option c. Option a.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In 2019, Osgood Corporation purchased $8.5 million worth of 10-year municipal bonds at face value. On December 31, 2021, the bonds had a fair value of $2,800,000 and Osgood reclassified the bonds from held-to-maturity to trading securities. Osgood's December 31, 2021, balance sheet and the 2021 income statement would show the following:
| Investment in bonds (TS) |
Income statement loss on investments |
||||||
| a. | $ | 2,800,000 | $ | 0 | |||
| b. | $ | 2,800,000 | $ | 5,700,000 | |||
| c. | $ | 8,500,000 | $ | 5,700,000 | |||
| d. | $ | 8,500,000 | $ | 0 | |||
Option b.
Option d.
Option c.
Option a.
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