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Business
Accounting
Interest revenue Gain (loss) on investment (Net income) Gain (loss) on investment (Unrealized) Reclassification adjustment (OCI) Net income Other Comprehensive income Comprehensive income 2023 $40,000 0 300,000 300,000 2023 $40,000 300,000 $340,000 2024 $40,000 (50,000) 300,000 (300,000) 2024 ($10,000) (300,000) ($310,000) Total $80,000 (50,000) 600,000 Total 0 $30,000 0 $30,000

Interest revenue Gain (loss) on investment (Net income) Gain (loss) on investment (Unrealized) Reclassification adjustment (OCI) Net income Other Comprehensive income Comprehensive income 2023 $40,000 0 300,000 300,000 2023 $40,000 300,000 $340,000 2024 $40,000 (50,000) 300,000 (300,000) 2024 ($10,000) (300,000) ($310,000) Total $80,000 (50,000) 600,000 Total 0 $30,000 0 $30,000

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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Bruce Company purchased $2,000,000 of Clarence, Incorporated, 4.0% bonds at par on July 1, 2023, with interest paid semi-annually. Bruce determined that it should account for the bonds as an available-for-sale investment. At December 31, 2023, the Clarence bonds had a fair value of $2,300,000. Bruce sold the Clarence bonds on July 1, 2024 for $1,950,000. Face amount of bond Stated (and market) rate December 31, 2023 fair value of bonds Selling price of bonds, July 1, 2024 $2,000,000 4.0% $2,300,000 $1,950,000 Complete the following tables to show the effect of the Clarence bonds on Bruce's net income, other comprehensive income, and comprehensive income for 2023, 2024, and cumulatively over the two-year period. FORMULAS FOR LOSSES MUST RETURN NEGATIVE VALUES.
Transcribed Image Text:Bruce Company purchased $2,000,000 of Clarence, Incorporated, 4.0% bonds at par on July 1, 2023, with interest paid semi-annually. Bruce determined that it should account for the bonds as an available-for-sale investment. At December 31, 2023, the Clarence bonds had a fair value of $2,300,000. Bruce sold the Clarence bonds on July 1, 2024 for $1,950,000. Face amount of bond Stated (and market) rate December 31, 2023 fair value of bonds Selling price of bonds, July 1, 2024 $2,000,000 4.0% $2,300,000 $1,950,000 Complete the following tables to show the effect of the Clarence bonds on Bruce's net income, other comprehensive income, and comprehensive income for 2023, 2024, and cumulatively over the two-year period. FORMULAS FOR LOSSES MUST RETURN NEGATIVE VALUES.
Interest revenue Gain (loss) on investment (Net income) Gain (loss) on investment (Unrealized) Reclassification adjustment (OCI) Net income Other Comprehensive income Comprehensive income 2023 $40,000 0 300,000 300,000 2023 $40,000 300,000 $340,000 2024 $40,000 (50,000) 300,000 (300,000) 2024 ($10,000) (300,000) ($310,000) Total $80,000 (50,000) 600,000 0 Total $30,000 0 $30,000
Transcribed Image Text:Interest revenue Gain (loss) on investment (Net income) Gain (loss) on investment (Unrealized) Reclassification adjustment (OCI) Net income Other Comprehensive income Comprehensive income 2023 $40,000 0 300,000 300,000 2023 $40,000 300,000 $340,000 2024 $40,000 (50,000) 300,000 (300,000) 2024 ($10,000) (300,000) ($310,000) Total $80,000 (50,000) 600,000 0 Total $30,000 0 $30,000
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