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Swifty Corporation owns corporate bonds at December 31, 2023, accounted for using the amortized cost model. These bonds have a par value of $896,000 and an amortized cost of $883,000. After an impairment review was triggered, Swifty determined that the discounted impaired cash flows are $826,000 using the current market rate of interest, but are $822,000 using the market rate when the bonds were first acquired. The company follows a policy of directly reducing the carrying amount of any impaired assets. Assume that no impairment loss had been recorded earlier.

Swifty Corporation owns corporate bonds at December 31, 2023, accounted for using the amortized cost model. These bonds have a par value of $896,000 and an amortized cost of $883,000. After an impairment review was triggered, Swifty determined that the discounted impaired cash flows are $826,000 using the current market rate of interest, but are $822,000 using the market rate when the bonds were first acquired. The company follows a policy of directly reducing the carrying amount of any impaired assets. Assume that no impairment loss had been recorded earlier.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Swifty Corporation owns corporate bonds at December 31, 2023, accounted for using the amortized cost model. These bonds have a par value of $896,000 and an amortized cost of $883,000. After an impairment review was triggered, Swifty determined that the discounted impaired cash flows are $826,000 using the current market rate of interest, but are $822,000 using the market rate when the bonds were first acquired. The company follows a policy of directly reducing the carrying amount of any impaired assets. Assume that no impairment loss had been recorded earlier. (a1) Your answer is correct. Assuming Swifty is a private enterprise that applies ASPE, prepare the journal entry related to the impairment at December 31, 2023. (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. List debit entry before credit entry.) Date (a2) Dec. 31, 2023 Account Titles and Explanation eTextbook and Media Loss on Impairment List of Accounts Bond Investment at Amortized Cost Date Your answer is correct. Dec. 31, 2024 Account Titles and Explanation Bond Investment at Amortized Cost Debit Assuming Swifty is a private enterprise that applies ASPE, prepare the journal entry related to a December 31, 2024 fair value of $851,000 and an adjusted carrying amount at that date of $830,500. (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. List debit entry before credit entry.) Recovery of Loss from Impairment 57000 Debit Credit 20500 57000 Attempts: 1 of 3 used Credit 20500
Transcribed Image Text:Swifty Corporation owns corporate bonds at December 31, 2023, accounted for using the amortized cost model. These bonds have a par value of $896,000 and an amortized cost of $883,000. After an impairment review was triggered, Swifty determined that the discounted impaired cash flows are $826,000 using the current market rate of interest, but are $822,000 using the market rate when the bonds were first acquired. The company follows a policy of directly reducing the carrying amount of any impaired assets. Assume that no impairment loss had been recorded earlier. (a1) Your answer is correct. Assuming Swifty is a private enterprise that applies ASPE, prepare the journal entry related to the impairment at December 31, 2023. (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. List debit entry before credit entry.) Date (a2) Dec. 31, 2023 Account Titles and Explanation eTextbook and Media Loss on Impairment List of Accounts Bond Investment at Amortized Cost Date Your answer is correct. Dec. 31, 2024 Account Titles and Explanation Bond Investment at Amortized Cost Debit Assuming Swifty is a private enterprise that applies ASPE, prepare the journal entry related to a December 31, 2024 fair value of $851,000 and an adjusted carrying amount at that date of $830,500. (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. List debit entry before credit entry.) Recovery of Loss from Impairment 57000 Debit Credit 20500 57000 Attempts: 1 of 3 used Credit 20500
Assuming that Swifty applies IFRS and that there has been a significant increase in credit risk, prepare the journal entry related to the impairment at December 31, 2023. (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. List debit entry before credit entry.) Date Account Titles and Explanation Dec. 31, 2023 Debit Credit
Transcribed Image Text:Assuming that Swifty applies IFRS and that there has been a significant increase in credit risk, prepare the journal entry related to the impairment at December 31, 2023. (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. List debit entry before credit entry.) Date Account Titles and Explanation Dec. 31, 2023 Debit Credit
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