Marigold Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amortized cost $51,100 Fair value 42,200 Expected credit losses 12,600 A. What is the amount of credit loss that marigold should report on this available-for-sale security at december 31, 2020? Amount of the credit loss $ 8,900 B. Prepare the journal entry to record the credit loss, if any ( and other adjustments needed), at December 31, 2020? date account titles and explanations debit credit 12/31/20 8,900 8,900 Please note that the answer is NOT Debit Loss on available for sale debt securities and Credit avilable for sale debt securities. These are the account titles I can choose from... Accumulated Other Comprehensive Loss Allowance for Doubtful Accounts Allowance to Reduce Inventory to Market Bad Debt Expense Bonds Payable Cash Call Option Common Stock Cost of Goods Sold Debt Investments Dividend Revenue Dividend Receivable Equity Investments Fair Value Adjustment Futures Contract Gain on Sale of Investments Gain on Settlement of Call Option Gain on Settlement of Put Option Interest Expense Interest Receivable Interest Revenue Inventory Investment Income Loss on Impairment Loss on Sale of Investments Loss on Settlement of Call Option Loss on Settlement of Put Option No Entry Notes Payable Paid-in Capital in Excess of Par - Common Stock Put Option Recovery of Loss from Impairment Retained Earnings Revenue from Investment Sales Revenue Swap Contract Unrealized Holding Gain or Loss - Equity Unrealized Holding Gain or Loss - Income

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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Marigold Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020.

Amortized cost		$51,100
Fair value		42,200
Expected credit losses		12,600

A. What is the amount of credit loss that marigold should report on this available-for-sale security at december 31, 2020?

Amount of the credit loss $ 8,900

B. Prepare the journal entry to record the credit loss, if any ( and other adjustments needed), at December 31, 2020?

date account titles and explanations debit credit

12/31/20 8,900

8,900

Please note that the answer is NOT Debit Loss on available for sale debt securities and Credit avilable for sale debt securities.

These are the account titles I can choose from...

Accumulated Other Comprehensive Loss
Allowance for Doubtful Accounts
Allowance to Reduce Inventory to Market
Bad Debt Expense
Bonds Payable
Cash
Call Option
Common Stock
Cost of Goods Sold
Debt Investments
Dividend Revenue
Dividend Receivable
Equity Investments
Fair Value Adjustment
Futures Contract
Gain on Sale of Investments
Gain on Settlement of Call Option
Gain on Settlement of Put Option
Interest Expense
Interest Receivable
Interest Revenue
Inventory
Investment Income
Loss on Impairment
Loss on Sale of Investments
Loss on Settlement of Call Option
Loss on Settlement of Put Option
No Entry
Notes Payable
Paid-in Capital in Excess of Par - Common Stock
Put Option
Recovery of Loss from Impairment
Retained Earnings
Revenue from Investment
Sales Revenue
Swap Contract
Unrealized Holding Gain or Loss - Equity
Unrealized Holding Gain or Loss - Income

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