Chapter 10, Problem 10.6SE

1.

To determine

Available-for-sale debt investments:

Available-for-sale debt investments are the investments in debt securities, which are neither referred as trading debt investments nor referred to as held-to-maturity debt investments. The investors do not wish to hold them till maturity, and hence reported either as current assets or as long-term assets in the balance sheet depending upon the holding period of the security.

To Journalize: The transactions for Restaurant Jo’s investment in Ja Incorporation stock for the year 2018.

2.

To determine

To identify: The category, and the value of the asset that the Restaurant Jo would report on its balance sheet as on December 31, 2018.

3.

To determine

The net effect of the investment on the Restaurant Jo’s net income for the year ended December 31, 2018.