Recording Entries for Impairment of Investments-HTM Atlanta Inc. holds an HTM bond investment in Falcons Corporation. The carrying value of the investment is $112,400 on December 31. Atlanta Inc. determines the present value of the amounts expected to be collected under the debt contract under the CECL model to be $96,000. a. Record the impairment loss on December 31. Date Account Name Dec. 31 Loss on Impairment Investment Income Account Name ◆ Loss on Impairment + ✓ x b. Assume that Atlanta Inc. holds the HTM bond investment in Falcons Corporation on December 31 of the following year. Record the adjusting entry if the present value of the amounts expected to be collected under the debt contract under the CECL model is now estimated to be $104,000. Date Dec. 31 Investment Income 4 Dr. 16,400 ✓ 0✓ X x Dr. Cr. 8,000 0 16,400✔ Cr. 8,000

Recording Entries for Impairment of Investments-HTM Atlanta Inc. holds an HTM bond investment in Falcons Corporation. The carrying value of the investment is $112,400 on December 31. Atlanta Inc. determines the present value of the amounts expected to be collected under the debt contract under the CECL model to be $96,000. a. Record the impairment loss on December 31. Date Account Name Dec. 31 Loss on Impairment Investment Income Account Name ◆ Loss on Impairment + ✓ x b. Assume that Atlanta Inc. holds the HTM bond investment in Falcons Corporation on December 31 of the following year. Record the adjusting entry if the present value of the amounts expected to be collected under the debt contract under the CECL model is now estimated to be $104,000. Date Dec. 31 Investment Income 4 Dr. 16,400 ✓ 0✓ X x Dr. Cr. 8,000 0 16,400✔ Cr. 8,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Brief Exercises Journalize entries for debt investments. BEH.1 (LO 1), AP Craig Corporation purchased debt investments for $40,800 on January 1, 2022. On July 1, 2022, Craig received cash interest of $1,660. Journalize the purchase and the receipt of interest. Assume no interest has been accrued. Journalize entries for stock investments. GRANT Docombor 1 the
Bond (held-to-maturity) investments Journalize the entries to record the following selected held-to-maturity investment transactions for Beacon Trust: If an amount box does not require an entry, leave it blank. a. Purchased for cash $576,000 of Vasquez City 7% bonds at 100 plus accrued interest of $10,080. b. Received first semiannual interest payment. c. Sold $288,000 of the bonds at 99 plus accrued interest of $1,680. d. Received face value of remaining bonds at their maturity.
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• The following information is available for Alpha's investments: Fair Value Market Original Adjustment Value Investment Cost 12/31/2020 Classification 12/31/2021 Available for Beta bonds $80,000 $6,000 dr. $78,000 Sale Gamma bonds $60,000 $4,000 cr. Trading $66,000 The journal entries on 12/31/21 for Beta will include: O Debit to Unrealized Loss - OCI for $8,000 O Debit to Unrealized Loss - NI for $2,000 O Debit to Unrealized Loss - NI for $6,000 O Debit to Unrealized Loss - NI for $8,000
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