Homework Help is Here – Start Your Trial Now!
Business
Accounting
Presented below is selected information related to the financial instruments of Pronghorn Company at December 31, 2020. This is Pronghorn Company's first year of operations. Carrying Fair Value Amount (at December 31) Investment in debt securities (intent is to hold to maturity) $42,700 $43,600 Investment in Chen Company stock 848,500 952,100 Bonds payable 237,600 213,400 (a) Pronghorn elects to use the fair value option for these investments. Assuming that Pronghorn's net income is $106,200 in 2020 before reporting any securities gains or losses, determine Pronghorn's net income for 2020. Assume that the difference between the carrying value and fair value is due to credit deterioration. Pronghorn's net income for 2020 210700 (b) Record the journal entry, if any, necessary at December 31, 2020, to record the fair value option for the bonds payable. (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.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 Bonds Payable 24200

Presented below is selected information related to the financial instruments of Pronghorn Company at December 31, 2020. This is Pronghorn Company's first year of operations. Carrying Fair Value Amount (at December 31) Investment in debt securities (intent is to hold to maturity) $42,700 $43,600 Investment in Chen Company stock 848,500 952,100 Bonds payable 237,600 213,400 (a) Pronghorn elects to use the fair value option for these investments. Assuming that Pronghorn's net income is $106,200 in 2020 before reporting any securities gains or losses, determine Pronghorn's net income for 2020. Assume that the difference between the carrying value and fair value is due to credit deterioration. Pronghorn's net income for 2020 210700 (b) Record the journal entry, if any, necessary at December 31, 2020, to record the fair value option for the bonds payable. (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.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 Bonds Payable 24200

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

PLEASE HELP WITH

LIST OF ACCOUNTS

  • Accumulated Other Comprehensive Loss
  • Allowance for Doubtful Accounts
  • Allowance to Reduce Inventory to Market
  • Bad Debt Expense
  • Bonds Payable
  • Cash
  • Call Option
  • Common Stock
  • Cost of Goods Sold
  • Debt Investments
  • Dividend Revenue
  • Dividend Receivable
  • Equity Investments
  • Fair Value Adjustment
  • Futures Contract
  • Gain on Sale of Investments
  • Gain on Settlement of Call Option
  • Gain on Settlement of Put Option
  • Interest Expense
  • Interest Receivable
  • Interest Revenue
  • Inventory
  • Investment Income
  • Loss on Impairment
  • Loss on Sale of Investments
  • Loss on Settlement of Call Option
  • Loss on Settlement of Put Option
  • No Entry
  • Notes Payable
  • Paid-in Capital in Excess of Par - Common Stock
  • Put Option
  • Recovery of Loss from Impairment
  • Retained Earnings
  • Revenue from Investment
  • Sales Revenue
  • Swap Contract
  • Unrealized Holding Gain or Loss - Equity
  • Unrealized Holding Gain or Loss - Income
Your answer is partially correct. Presented below is selected information related to the financial instruments of Pronghorn Company at December 31, 2020. This is Pronghorn Company's first year of operations. Carrying Fair Value Amount (at December 31) Investment in debt securities (intent is to hold to maturity) $42,700 $43,600 Investment in Chen Company stock 848,500 952,100 Bonds payable 237,600 213,400 (a) Pronghorn elects to use the fair value option for these investments. Assuming that Pronghorn's net income is $106,200 in 2020 before reporting any securities gains or losses, determine Pronghorn's net income for 2020. Assume that the difference between the carrying value and fair value is due to credit deterioration. Pronghorn's net income for 2020 2$ 210700 (b) Record the journal entry, if any, necessary at December 31, 2020, to record the fair value option for the bonds payable. (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.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 Bonds Payable 24200 24200
Transcribed Image Text:Your answer is partially correct. Presented below is selected information related to the financial instruments of Pronghorn Company at December 31, 2020. This is Pronghorn Company's first year of operations. Carrying Fair Value Amount (at December 31) Investment in debt securities (intent is to hold to maturity) $42,700 $43,600 Investment in Chen Company stock 848,500 952,100 Bonds payable 237,600 213,400 (a) Pronghorn elects to use the fair value option for these investments. Assuming that Pronghorn's net income is $106,200 in 2020 before reporting any securities gains or losses, determine Pronghorn's net income for 2020. Assume that the difference between the carrying value and fair value is due to credit deterioration. Pronghorn's net income for 2020 2$ 210700 (b) Record the journal entry, if any, necessary at December 31, 2020, to record the fair value option for the bonds payable. (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.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 Bonds Payable 24200 24200
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Double entry bookkeeping system
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
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS