Juliana Company has the following investments as of December 31, 2025:Investments in common stock of Beam CompanyInvestment in debt securities of NineSquare CompanyIn both investments, the carrying value and the fair value of these two investments are the same at December 31, 2025. Juliana's stockinvestments does not result in significant influence on the operations of Beam Company. Juliana's debt investment is considered held-to-maturity. At December 31, 2026, the shares in Beam Company are valued at $1,200,000; the debt investment securities ofNineSquare are valued at $2,600,000. Assume that the debt investments are considered impaired.(a)Your Answer✓ Your answer is correct.(b)Prepare the journal entries to record the impairment of the debt securities at December 31, 2026. (Credit account titles areautomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titlesand enter o for the amounts. List debit entry before credit entry.)Account Titles and ExplanationDateDec. 31, 2026SolutionCorrect Answer (Used)eTextbook and MediaYour AnswerList of AccountsBad Debt ExpenseDateDec. 31, 2027Allowance for Doubtful Accounts* Your answer is incorrect.Dec. 31, 2027Correct AnswerAccount Titles and ExplanationAllowance for Doubtful AccountsAssuming the fair value of the Beam shares is $1,400,000 and the value of its debt investment is $2,950,000, what entries, if any,should be recorded in 2027 related to impairment? (Credit account titles are automatically indented when the amount is entered. Donot indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries beforecredit entries.)Debt Investments$1,700,000$3,500,000(To adjust stock investment)Fair Value AdjustmentUnrealized Holding Gain or Loss-Income(To adjust bond investment)Debit900000Debit350,000Credit295000090000Assistance UsedAttempts: unlimitedCredit350,029500

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Juliana Company has the following investments as of December 31, 2025: Investments in common stock of Beam Company Investment in debt securities of NineSquare Company $1,700,000 $3,500,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2025. Juliana's stock investments does not result in significant influence on the operations of Beam Company. Juliana's debt investment is considered held- to-maturity. At December 31, 2026, the shares in Beam Company are valued at $1,200,000; the debt investment securities of NineSquare are valued at $2,600,000. Assume that the debt investments are considered impaired.

Juliana Company has the following investments as of December 31, 2025: Investments in common stock of Beam Company Investment in debt securities of NineSquare Company $1,700,000 $3,500,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2025. Juliana's stock investments does not result in significant influence on the operations of Beam Company. Juliana's debt investment is considered held- to-maturity. At December 31, 2026, the shares in Beam Company are valued at $1,200,000; the debt investment securities of NineSquare are valued at $2,600,000. Assume that the debt investments are considered impaired.

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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