Prepare journal entries to capture the following events. Please ignore the interests and bond amortization. Use a tax rate of 20% if you need one. 1.12/15/2021: Purchased $200,000 of Harbox bonds, which is viewed as an AFS investment. 2.12/31/2021: Estimated the fair value of the Harbox investment at $187,000. 3.1/15/2022: Sold the Harbox investment for $162,000 and made all necessary entries to remove the Harbox investment from the accounts: a.Sale of investments: b.Reclassification (For expediency, you don’t need to record the temporary unrealized gains/losses between 12/31/2021 and 1/15/2022, since they will be reversed anyways):
Prepare journal entries to capture the following events. Please ignore the interests and bond amortization. Use a tax rate of 20% if you need one. 1.12/15/2021: Purchased $200,000 of Harbox bonds, which is viewed as an AFS investment. 2.12/31/2021: Estimated the fair value of the Harbox investment at $187,000. 3.1/15/2022: Sold the Harbox investment for $162,000 and made all necessary entries to remove the Harbox investment from the accounts: a.Sale of investments: b.Reclassification (For expediency, you don’t need to record the temporary unrealized gains/losses between 12/31/2021 and 1/15/2022, since they will be reversed anyways):
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1.12/15/2021: Purchased $200,000 of Harbox bonds, which is viewed as an AFS investment.
2.12/31/2021: Estimated the fair value of the Harbox investment at $187,000.
3.1/15/2022: Sold the Harbox investment for $162,000 and made all necessary entries to remove the Harbox investment from the accounts:
a.Sale of investments:
b.Reclassification (For expediency, you don’t need to record the temporary unrealized gains/losses between 12/31/2021 and 1/15/2022, since they will be reversed anyways):
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