Tamarisk Corporation has municipal bonds classified as a held-to-maturity at December 31, 2025. These bonds have a par value of $791,000, an amortized cost of $791,000, and a fair value of $709,000. The company believes that impairment accounting is now appropriate for these bonds. (a) Prepare the journal entry to recognize the impairment. (List debit entry before credit entry. 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 (b) eTextbook and Media List of Accounts Save for Later What is the new carrying value of the municipal bonds? New carrying value $ (c) Yes Given that the maturity value of the bonds is $791,000, should Tamarisk Corporation amortize the difference between the carrying amount and the maturity value over the life of the bonds? e Textbook and Media List of Accounts Save for Later Debit Credit Attempts: unlimited Submit Answer Debit Attempts: unlimited Submit Answer At December 31, 2026, the fair value of the municipal bonds is $749,000. Prepare the entry (if any) to record this information. (List debit entry before credit entry. 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 Credit
Tamarisk Corporation has municipal bonds classified as a held-to-maturity at December 31, 2025. These bonds have a par value of $791,000, an amortized cost of $791,000, and a fair value of $709,000. The company believes that impairment accounting is now appropriate for these bonds. (a) Prepare the journal entry to recognize the impairment. (List debit entry before credit entry. 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 (b) eTextbook and Media List of Accounts Save for Later What is the new carrying value of the municipal bonds? New carrying value $ (c) Yes Given that the maturity value of the bonds is $791,000, should Tamarisk Corporation amortize the difference between the carrying amount and the maturity value over the life of the bonds? e Textbook and Media List of Accounts Save for Later Debit Credit Attempts: unlimited Submit Answer Debit Attempts: unlimited Submit Answer At December 31, 2026, the fair value of the municipal bonds is $749,000. Prepare the entry (if any) to record this information. (List debit entry before credit entry. 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 Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Tamarisk Corporation has municipal bonds classified as a held-to-maturity at December 31, 2025. These bonds have a
par value of $791,000, an amortized cost of $791,000, and a fair value of $709,000. The company believes that
impairment accounting is now appropriate for these bonds.
(a)
Prepare the journal entry to recognize the impairment. (List debit entry before credit entry. 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.)
(b)
Account Titles and Explanation
eTextbook and Media
List of Accounts
Save for Later
What is the new carrying value of the municipal bonds?
New carrying value $
(c)
Yes
Given that the maturity value of the bonds is $791,000, should Tamarisk Corporation amortize the difference
between the carrying amount and the maturity value over the life of the bonds?
eTextbook and Media
List of Accounts
Save for Later
Debit
Account Titles and Explanation
Credit
Attempts: unlimited Submit Answer
Debit
At December 31, 2026, the fair value of the municipal bonds is $749,000. Prepare the entry (if any) to record this
information. (List debit entry before credit entry. 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.)
Attempts: unlimited Submit Answer
Credit
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