On January 1, Year 9, the first day of its fiscal year, Noel Company purchased 2,000 shares of available-for-sale securities at a price of $10 per share. These securities had a fair value of $24,000 and $30,000 on December 31, Year 9, and December 31, Year 10, respectively. No dividends were paid, and all of the securities were sold on December 31, Year 10. Noel recognizes all holding gains and losses on available-for-sale securities before recognizing realized gain. Prepare the journal entries, if any, necessary for December 31, Year 9, and December 31, Year 10, that relate to these available-for-sale securities. Also prepare the journal entry to record the sale of the securities on December 31, Year 10. Ignore income tax effects. To prepare the entries, in the Account column, select the appropriate account from the list provided. Then enter the correct amounts in the Debit or Credit columns. Each choice may be used once, more than once, or not at all. Credit Choices Account December 31, Year 9 1. 2. December 31, Year 10 3. 4. Sale of the securities 5. 6. 7. 8. 9. Debit A) No entry required B) Unrealized holding gain-OCI C) Unrealized holding gain-earnings D) Unrealized holding loss-001 E) Unrealized holding loss-earnings F) Securities fair value adjustment G) Cash H) Available-for-sale securities I) Gain on sale of securities
On January 1, Year 9, the first day of its fiscal year, Noel Company purchased 2,000 shares of available-for-sale securities at a price of $10 per share. These securities had a fair value of $24,000 and $30,000 on December 31, Year 9, and December 31, Year 10, respectively. No dividends were paid, and all of the securities were sold on December 31, Year 10. Noel recognizes all holding gains and losses on available-for-sale securities before recognizing realized gain. Prepare the journal entries, if any, necessary for December 31, Year 9, and December 31, Year 10, that relate to these available-for-sale securities. Also prepare the journal entry to record the sale of the securities on December 31, Year 10. Ignore income tax effects. To prepare the entries, in the Account column, select the appropriate account from the list provided. Then enter the correct amounts in the Debit or Credit columns. Each choice may be used once, more than once, or not at all. Credit Choices Account December 31, Year 9 1. 2. December 31, Year 10 3. 4. Sale of the securities 5. 6. 7. 8. 9. Debit A) No entry required B) Unrealized holding gain-OCI C) Unrealized holding gain-earnings D) Unrealized holding loss-001 E) Unrealized holding loss-earnings F) Securities fair value adjustment G) Cash H) Available-for-sale securities I) Gain on sale of securities
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, Year 9, the first day of its fiscal year, Noel Company purchased 2,000 shares of available-for-sale securities
at a price of $10 per share. These securities had a fair value of $24,000 and $30,000 on December 31, Year 9, and
December 31, Year 10, respectively. No dividends were paid, and all of the securities were sold on December 31,
Year 10. Noel recognizes all holding gains and losses on available-for-sale securities before recognizing realized gain.
Prepare the journal entries, if any, necessary for December 31, Year 9, and December 31, Year 10, that relate to these
available-for-sale securities. Also prepare the journal entry to record the sale of the securities on December 31, Year 10.
Ignore income tax effects.
To prepare the entries, in the Account column, select the appropriate account from the list provided. Then enter the correct
amounts in the Debit or Credit columns. Each choice may be used once, more than once, or not at all.
Credit
Choices
Account
December 31, Year 9
1.
2.
December 31, Year 10
3.
4.
Sale of the securities
5.
6.
7.
8.
9.
Debit
A) No entry required
B) Unrealized holding gain-OCI
C) Unrealized holding gain-earnings
D) Unrealized holding loss-001
E) Unrealized holding loss-earnings
F) Securities fair value adjustment
G) Cash
H) Available-for-sale securities
I) Gain on sale of securities
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