Answered: Portfollo of Avallable-for-Sale…

Portfollo of Avallable-for-Sale Securitles Cost Falr Value December 31, Year 1 $13,000 $15,000 December 31, Year 2 20,000 25,000 December 31, Year 3 23,000 29,000 December 31, Year 4 16,500 19,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: On July 1, 2023, Sheffield Aggregates Ltd. purchased 7% bonds with a maturity value of $135,000 for…

A: Journal entry is the initial record of the transactions in the books of accounts it includes at…

Q: I need help with step 2 of this problem.

A: When bonds issued at discount, such discount on bonds payable has to amortized over the life period…

Q: Required information (The following information applies to the questions displayed below] Stoll…

A: In the accounting books of the business organizations the journal entry served as a record of its…

Q: Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term…

A: Bonds: Bonds indicate fixed-income financial instruments issued by Corporates, any government, and…

Q: General Motors invests in securities of other companies. Access GM’s 2019 10-K (which includes…

A: In the fiscal year ending December 31, 2019, General Motors (GM) showcased a robust financial…

Q: G’s investment account relates to its debt investments and its equity investments. For balance sheet…

A: G's Investment as follows: Particulars Bond held as Trading Investment Bond held as Available for…

Q: Match each of the items below with its most appropriately-related “letter” classification. (“Letter”…

A: As per the company policy, since you have posted a question with multiple sub-parts, we will solve…

Q: For the following investments identify whether they are: (1) Trading Securities, (2)…

A: Solution: A. Purchase bond maturing in 20 years. The company intends to use the cash flow generated…

Q: View Policies Show Attempt History Current Attempt in Progress On January 1, 2020, Teal Company sold…

A: The bonds are issued at premium when market rate is lower than the coupon rate of bonds.

Q: Required information Problem 15-3A (Algo) Debt Investments in available-for-sale securities;…

A: Answer:- Debt investment meaning:- The acquisition of a significant amount of debt with the…

Q: Transactions associated with the financing process include all of the following except: Select one:…

A: Business Financing -A small firm can obtain capital through various methods. A financial…

Q: Match each of the items below with its most appropriately-related “letter” classification. (“Letter”…

A: Since the question has more than 3 sub-parts, the first 12 subparts are answered. If you want the…

Q: ecurity A B C Total Cost $16.985 12,930 21,760 $51,675 Fair Value $16.030 15,179 18,160 $49,369

A: A journal entry is a basic accounting record that is used to chronologically track financial…

Q: On October 1, 2018, North Co. invested excess cash of $80,000 by purchasing bonds of South Inc. At…

A: Adjusting entries are prepared at the end of the accounting period in order to ensure the accrual…

Q: Security A B Cost $17,359 11,690 Fair Value $16,420 14,443

A: As the debt investments are presented at fair value, the unrealized gain/ loss is recognized in the…

Q: 1a) What was the issue price on January 1 of this year? 1b) What amount of interest expense should…

A: Price of bond is the present value of coupon payment and present value of par value of bond taken on…

Q: On January L 2000, $1,000,000 of 10 percent debenture bonds were acquired by Means Corporation at…

A: Available for sale securities are initially recorded at the purchase price and later changed to the…

Q: The total bond interest expense that should be reported by the company for the year 2020.

A: Toledo Inc. has issued bonds of P 80,00,000 on 01.01.2016. The bonds are for a tenure of 25 years…

Q: On October 1, Qilan Ltd. purchased 7% bonds with a face value of $1,000 for trading purposes,…

A: As you have asked multiple sub-parts we can solve only first three sub-parts for you please repost…

Q: Metlock Corporation has the following trading portfolio of debt investments as Security Cost A…

A: A journal entry is a basic accounting record that is used to chronologically track financial…

Q: , Journal entry worksheet: 1. Record the bond issue. (Jan. 01, 2021) 2. Record the first…

A: Formula: Interest expense = Bond value x Time period x interest rate.

Q: Markel Inc. has bonds outstanding during a year in which the general (risk-free) rate of interest…

A: Interest expense relates to the cost of borrowing money. It is the price that a lender charges a…

Q: The currently maturing portion of long-term debt should be classified as a current liability if the…

A: Answer: The currently maturing portion of long term debt should be classified as current liability…

Q: 10. Journal entry worksheet: 1. Record the bond issue. (Jan. 01, 2021) 2. Record the first…

A: Solution:- Preparation of journal entries as follows:- Basic information as follows:- Issue 540,000…

Q: The following information is available for Tamarisk Corporation's available-for-sale debt securities…

Q: 1.In accordance with CFA standard V(B), in preparing a research report involving securities, the…

A: Both questions relate to CFA (Chartered Financial Analyst) standards V(B) and VI(A), which set forth…

Q: Determine the amounts that Azur Inc. would report in relation to each of its investments on its…

A: When a company purchases a bond, the accounting treatment depends on the purpose for which the bond…

Q: Kellogg issued 20-year bonds. which of the following ratios will the bondholders most likely monitor…

A: Bonds are the liabilities of the company which is issued to raise the funds required to finance the…

Q: ecurities would be classified as marketable securities in the current asset section of the balance…

A: Securities - Because investors have specific information demands, securities are available. In…

Q: At December 31, 2020, the available-for-sale debt securities for Larkspur, Inc. are as follows.…

A: Unrealized Gain/ Loss - Available of Sale Securities should always reported at fair value. At the…

Q: Required a) Explain, including calculations, how the issue of the bond would be accounted for by…

A: On 1st January 2021 Corgi Ltd. issued bonds of £5 million at par value, the bonds are redeemable on…

Q: If bonds with a face value of $124000 are converted into common stock when the carrying value of the…

A: Bonds payable have a face value of $124000 which is shown in the statements. $6000 will be shown as…

Q: Debt securities held to finance the future construction of additional manufacturing plants should be…

A: The objective of the question is to determine the correct classification of debt securities held to…

Q: On January 1, 2018, Methodical Manufacturing issued 100 bonds, each with a face value of $1,000, a…

A: Journal entry is a primary entry that records the financial transactions initially.

Q: Ticker Services began operations in Year 1 and holds long-term investments in available-for-sale…

A: Debt Investment: Debt investment is the broad term for taking on a sizable amount of borrowing plus…

Q: $17,490 12,060 24,450 $16,160 16,082 16,550

A: The unrealized gain or loss calculated from difference between the fair value and cost is recogized…

Question

Ticker Services began operations in Year 1 and holds long-term investments in available-for-sale debt
securities. The year-end cost and fair values for its portfolio of these investments follow. Prepare journal
entries to record each year-end fair value adjustment for these securities.

Portfollo of Avallable-for-Sale Securitles
Cost
Falr Value
December 31, Year 1
$13,000
$15,000
December 31, Year 2
20,000
25,000
December 31, Year 3
23,000
29,000
December 31, Year 4
16,500
19,000

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Realized gains and losses are recorded on the incomestatement for which of the following transactions in trading securities and available-for-sale securities?a. When adjusting trading securities to fair value.b. When adjusting available-for-sale securities to fair value.c. Only when recording the sale of trading securities.d. When recording the sale of either trading securities oravailable-for-sale securities
3. Prepare the journal entries to record the issuance of the bonds by Sanyal and Barnwell’s investment on February 1, 2024. 4. Prepare the journal entries by both firms to record all events related to the bonds through January 31, 2026. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2024 and the first week of 2025. December 17, 2024 Purchased 195 Grocers’ Supply Corporation bonds at par for $487,500. December 28, 2024 Received interest of $5,800 from the Grocers’ Supply Corporation bonds. December 31, 2024 Recorded any necessary adjusting entry relating to the Grocers’ Supply Corporation bonds. The market price of the bond was $3,000 per bond. January 5, 2025 Sold the Grocers' Supply Corporation bonds for $546,000. Prepare the appropriate journal entry or entries for each transaction. Indicate any amounts that Rantzow-Lear Company would report in its 2024 balance sheet and income statement as a result of this investment. Ignore income…
Rantzow - Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company's fiscal year ends on December 31. The following selected transactions relating to Rantzow - Lear's trading account occurred during December 2024 and the first week of 2025. December 17, 2024 Purchased 195 Grocers' Supply Corporation bonds at par for $487,500. December 28, 2024 Received interest of $5,800 from the Grocers' Supply Corporation bonds. December 31, 2024 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market price of the bond was $3,000 per bond. January 5, 2025 Sold the Grocers' Supply Corporation bonds for $546,000. Required: Prepare the appropriate journal entry or entries for each transaction. Indicate any amounts that Rantzow - Lear Company would report in its 2024 balance sheet and income statement as a result of this investment. Ignore income…
Use the financial statement effects template to record the accounts and amounts for the following four transactions involving investments in marketable debt securities classified as available-for-sale securities. Assume that these transactions occur in 2016 (before the new rules for securities went into effect).a. Loudder Inc. purchases 5,000 bonds with a face value of $1,000 per bond. The bonds are purchased at par for cash and pay interest at a semi-annual rate of 4%.b. Loudder receives semi-annual cash interest of $200,000.c. Year-end fair value of the bonds is $978 per bond.d. Shortly after year-end, Loudder sells all 5,000 bonds for $970 per bond.Use negative signs with answers, if appropriate.
Crawford Inc. has bonds outstanding during a year in which the general (risk-free) rate of interest has risen. Crawford elected the fair value option for the bonds upon issuance. What will the company report for the bonds in its income statement for the year?
presentation. EH.6 (LO 3), AP At December 31, 2022, the trading debt securities for Gwynn, Inc. are as follows. Fair Value Instructions Security A B C Total Cost $18,100 12,500 23,000 $53,600 $16,000 14,800 18,000 $48,800 a. Prepare the adjusting entry at December 31, 2022, to report the securities at fair value. b. Show the balance sheet and income statement presentation at December 31, 2022, after adjustment to fair value. Prepare adjusting entry to record fair value, and indicate statement presentation.