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At December 31, 2020, the available-for-sale debt portfolio for Kingbird, Inc. is as follows.
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Security
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Cost
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Fair Value
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Unrealized
Gain (Loss) |
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| A | $32,375 | $27,750 | $(4,625 | ) | |||
| B | 23,125 | 25,900 | 2,775 | ||||
| C | 42,550 | 47,175 | 4,625 | ||||
| Total | $98,050 | $100,825 | 2,775 | ||||
| Previous fair value adjustment balance—Dr. | 740 | ||||||
| Fair value adjustment—Dr. | $2,035 |
On January 20, 2021, Kingbird, Inc. sold security A for $27,935. The sale proceeds are net of brokerage fees.
Prepare the
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Date
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Account Titles and Explanation
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Debit
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Credit
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| Jan. 20, 2021 |
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- Holly Company invests its excess cash in marketable securities. At the beginning of 2019, it had the following portfolio of investments in available-for-sale debt securities: Security Par Value Amortized Cost 12/31/18 Fair Value Igor Company 5% bonds, maturing on Dec. 31, 2028 $10,000 $8,400 $9,400 Ozone Company 6% bonds, maturing on Dec. 31, 2023 $20,000 23,100 21,700 Totals $31,500 $31,100 During 2019, the following transactions occurred: Mar. 31 Purchased Union Company 8% bonds with a face value of $10,000 for $10,000 plus accrued interest; interest is payable on the bonds each June 30 and December 31. Mar. 31 Sold the Ozone Company investment for $22,000 plus accrued interest. June 30 Received the semiannual interest on the Union Company bonds. Dec. 31 Received the annual interest on the Igor Company bonds and the semiannual interest on the Union Company bonds. The December 31 closing market prices were as follows: Igor Company bonds,…On its December 31, 2020 balance sheet, Wildhorse Company appropriately reported a $10,000 debit balance in its Fair Value Adjustment account. There was no change during 2021 in the composition of Wildhorse’s portfolio of debt investments held as available-for-sale debt securities. The following information pertains to that portfolio: Security Cost Fair value at 12/31/21 X $148000 $187000 Y 118000 103500 Z 211000 161000 $477000 $451500 The amount of unrealized loss to appear as a component of comprehensive income for the year ending December 31, 2021 is $24500. $35500. $39000. $0.Pharoah Company has these data at December 31, 2022, the end of its first year of operations. Debt Securities Trading Available-for-sale (a) Cost $119,700 100,300 The available-for-sale securities are held as a long-term investment. Fair Value $125,700 98,300 Prepare the adjusting entries to report: (1) Trading securities at fair value and (2) Available-for-sale securities at fair value. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation (1) Debit Credit
- Problem 5-21 (AICPA Adapted) On January 1, 2020, Nilo Company reported bonds payable of P8,000,000 and related unamortized discount of P430,000. On January 1, 2020, the entity retired P4,000,000 of the outstanding bonds at face amount plus a call premium of P100,000. What amount should be reported in the 2020 income statement as loss on early extinguishment of debt? а. b. 100,000 215,000 d. 315,000 с.At December 31, 2020, the available-for-sale debt portfolio for Whispering, Inc. is as follows. Security Cost Fair Value UnrealizedGain (Loss) A $ 27,125 $ 23,250 $( 3,875 ) B 19,375 21,700 2,325 C 35,650 39,525 3,875 Total $ 82,150 $ 84,475 2,325 Previous fair value adjustment balance—Dr. 620 Fair value adjustment—Dr. $ 1,705 On January 20, 2021, Whispering, Inc. sold security A for $ 23,405. The sale proceeds are net of brokerage fees. (a) Prepare the adjusting entry at December 31, 2020, to report the portfolio at fair value. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit CreditOn its December 31, 2020 balance sheet, a company correctly reported a $89,000 debit balance in its Fair Value Adjustment (Available-for-Sale) account. There was no change during 2021 in the composition of the company’s portfolio of available-for-sale securities. At the end of 2021, the following information pertains to the portfolio: Cost at 12/31/21 Fair value at 12/31/21 $269,000 $154,000 The unrealized gain/loss to appear as a component of comprehensive income for the year ending December 31, 2021 is $____________. (Very Important: if you obtain an unrealized holding loss, then you need to put a minus sign in front of the amount. If you obtain an unrealized holding gain, then no plus or minus sign is needed.)
- es Required information [The following information applies to the questions displayed below.] Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following. Fair Value $ 490,000 152,000 640, 190 Available-for-Sale Securities Company A bonds Company B notes Company C bonds Cost $ 533,600 159, 230 662,000 Stoll enters into the following transactions involving its available-for-sale debt securities this year. January 29 Sold one-half of the Company B notes for $78,640. July 6 Purchased Company X bonds for $126,900. November 13 Purchased Company Z notes for $267,900. December 9 Sold all of the Company A bonds for $521,600. Fair values at December 31 are B, $83,900; C, $605,200; X, $107,000; and Z, $275,000. Required: 1. Prepare journal entries to record these transactions, including the December 31 adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities. 2. Determine the amount Stoll…NoneOn January 1, 2021, Jackie Company issued P8,000,000 8% eight-year bonds. Similar bonds had an effective rate of 8.8%. On yearend, the bonds had a market value quotation of 88. Jackie opted to measure the bonds at fair value. How much is the net effect of bonds on the 2021 Statement of Comprehensive Income? [Indicate whether it is a gain or loss] How much is the discount/premium amortization during 2022? [Indicate whether it is a discount or premium]
- On December 31, 2019, Novak Corp. provided you with the following pre-adjustment information regarding its portfolio of investments held for short-term profit-taking: Investments Moonstar Corp. shares Bilby Corp. shares. Radius Ltd. shares Total portfolio December 31, 2019 Carrying Amount $20,000 10,000 19,800 $49,800 Fair Value $18,800 8,900 20,400 $48,100 During 2020, the Bilby Corp. shares were sold for $9,500. The fair values of the securities on December 31, 2020, were as follows: Moonstar Corp. shares $19,900 and Radius Ltd. shares $20,300. The company does not recognize and report dividends and other components of investment gains and losses separately. Prepare the adjusting journal entry needed on December 31, 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit CreditAssume it is January 1, 2021. Zelus Sport Shoe Company has three debt issues outstanding. 6.5% Notes December 31, 2029 ($200 million face value) Market price $980.05. 7.0% Bonds, maturing December 31, 2031 ($100 million face value) Market price $984.98. 7.5% Bonds, maturing December 31, 2037 ($200 million face value) Market price $1,029.15. All bonds have a $1,000 face value and pay interest semi-annually. Use a 4.0% risk-free rate and a 7.0% market risk premium to compute Zelus’s cost of equity. The table shows the weekly closing prices for Zelus and the S&P 500 Index. Last week Zelus’s stock closed at $99.75 per share. There are 16 million shares of common stock outstanding. The company also has 8 million shares of preferred stock outstanding. The preferred stock pays an annual $4.00 dividend and current sells for $50 per share. The tax rate is 30%. Assume you are doing the WACC calculation on January 1, 2020, and that the semi-annual interest payments of the notes and…At December 31, 2020, the end of its first year of operations, the non-trading securities for Oriole AG are as follows. They have the same cost and fair value. The securities are considered to be a long-term investment. Security A B C Date Cost CHF17,800 Dec. 31 12,900 22,700 CHF53,400 Fair Value CHF15,800 14,500 18,600 Prepare the adjusting entry at December 31, 2020, to report the securities at fair value. (Credit account titles are automatically Indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) CHF48,900 Account Titles and Explanation Unrealized Gain or Loss-Equity Fair Value Adjustment-Non-Trading Debit Credit
