On March 25, 2021, Phillips Corporation purchased bonds of Atlas Corporation for $160 million and classified the securities as trading securities. On December 31, 2021, these bonds were valued at $176 million. Three months later, on April 3, 2022, Phillips Corporation sold these bonds for $167 million. As part of the multistep approach to record the 2022 transaction, Phillips Corporation should first update the fair value adjustment by recording: An unrealized holding gain of $25 million in 2022. An unrealized holding loss of $9 million in 2022. An unrealized holding gain of $7 million in 2022. A gain of $7 million in 2022.
On March 25, 2021, Phillips Corporation purchased bonds of Atlas Corporation for $160 million and classified the securities as trading securities. On December 31, 2021, these bonds were valued at $176 million. Three months later, on April 3, 2022, Phillips Corporation sold these bonds for $167 million. As part of the multistep approach to record the 2022 transaction, Phillips Corporation should first update the fair value adjustment by recording: An unrealized holding gain of $25 million in 2022. An unrealized holding loss of $9 million in 2022. An unrealized holding gain of $7 million in 2022. A gain of $7 million in 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On March 25, 2021, Phillips Corporation purchased bonds of Atlas Corporation for $160 million and classified the securities as trading securities. On December 31, 2021, these bonds were valued at $176 million. Three months later, on April 3, 2022, Phillips Corporation sold these bonds for $167 million. As part of the multistep approach to record the 2022 transaction, Phillips Corporation should first update the fair value adjustment by recording:
-
An unrealized holding gain of $25 million in 2022.
-
An unrealized holding loss of $9 million in 2022.
-
An unrealized holding gain of $7 million in 2022.
-
A gain of $7 million in 2022.
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