Ivanhoe Company purchased, on January 1, 2025, as an available-for-sale security, $79,000 of the 11%, 5-year bonds of Accustart Corporation for $73,443, which provides an 13% return. Prepare Ivanhoe's journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortization, and (c) the year-end fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) The bonds have a year-end fair value of $75,050. Assume effective-interest amortization is used. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 1,225.) lo. Date Account Titles and Explanation a) January 1, 2025 Cash ၁) December 31, 2025 Cash c) December 31, 2025 Fair Value Adjustment Unrealized Holding Gain or Loss - Equity Debit J

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 7RE: Refer to the information in RE13-5. Assume that on December 31, 2019, the investment in Smith...
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Ivanhoe Company purchased, on January 1, 2025, as an available-for-sale security, $79,000 of the 11%, 5-year bonds of Accustart
Corporation for $73,443, which provides an 13% return.
Prepare Ivanhoe's journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortization,
and (c) the year-end fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) The bonds have a year-end
fair value of $75,050. Assume effective-interest amortization is used. (List all debit entries before credit entries. Credit account titles are
automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and
enter O for the amounts. Round answers to O decimal places, e.g. 1,225.)
lo.
Date
Account Titles and Explanation
a)
January 1, 2025
Cash
၁)
December 31, 2025
Cash
c)
December 31, 2025
Fair Value Adjustment
Unrealized Holding Gain or Loss - Equity
Debit
J
Transcribed Image Text:Ivanhoe Company purchased, on January 1, 2025, as an available-for-sale security, $79,000 of the 11%, 5-year bonds of Accustart Corporation for $73,443, which provides an 13% return. Prepare Ivanhoe's journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortization, and (c) the year-end fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) The bonds have a year-end fair value of $75,050. Assume effective-interest amortization is used. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 1,225.) lo. Date Account Titles and Explanation a) January 1, 2025 Cash ၁) December 31, 2025 Cash c) December 31, 2025 Fair Value Adjustment Unrealized Holding Gain or Loss - Equity Debit J
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