IFRS: International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring a standard global language in accounting, so that the other firms across the globe can understand the accounting term of all other businesses. Investment : The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment. Held-to-maturity security : The debt securities which are held by the investor with the intent to hold the investment till its maturity are referred to as held-to-maturity securities. Available-for-sale (AFS) securities : These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk. Other-than-temporary (OTT) impairment : When the market value of an investment declines to a value lower than its cost, it is referred to as OTT impairment. The OTT impairment is considered as permanent loss and the loss is recorded as decrease in net income or earnings. Unrealized holding gains and losses : These are gains and losses which are unrealized and are the result of changes in cost and fair values of the investment for the period the investment is held. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Debit and credit rules: Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts. Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts. To Journalize : The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2016.

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Answer 1

Question

Chapter 12, Problem 12.31E

a)

To determine

IFRS: International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring a standard global language in accounting, so that the other firms across the globe can understand the accounting term of all other businesses.

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Held-to-maturity security: The debt securities which are held by the investor with the intent to hold the investment till its maturity are referred to as held-to-maturity securities.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other-than-temporary (OTT) impairment: When the market value of an investment declines to a value lower than its cost, it is referred to as OTT impairment. The OTT impairment is considered as permanent loss and the loss is recorded as decrease in net income or earnings.

Unrealized holding gains and losses: These are gains and losses which are unrealized and are the result of changes in cost and fair values of the investment for the period the investment is held.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2016.

b)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

c)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be available for sale securities, as on December 31, 2016.

d)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

e)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be equity investment rather than debt investment, as on December 31, 2017.

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Students have asked these similar questions

Suppose you take out a five-year car loan for $14000, paying an annual interest rate of 4%. You make monthly payments of $258 for this loan. Complete the table below as you pay off the loan. Months Amount still owed 4% Interest on amount still owed (Remember to divide by 12 for monthly interest) Amount of monthly payment that goes toward paying off the loan (after paying interest) 0 14000 1 2 3 + LO 5 6 7 8 9 10 10 11 12 What is the total amount paid in interest over this first year of the loan?

Suppose you take out a five-year car loan for $12000, paying an annual interest rate of 3%. You make monthly payments of $216 for this loan. mocars Getting started (month 0): Here is how the process works. When you buy the car, right at month 0, you owe the full $12000. Applying the 3% interest to this (3% is "3 per $100" or "0.03 per $1"), you would owe 0.03*$12000 = $360 for the year. Since this is a monthly loan, we divide this by 12 to find the interest payment of $30 for the month. You pay $216 for the month, so $30 of your payment goes toward interest (and is never seen again...), and (216-30) = $186 pays down your loan. (Month 1): You just paid down $186 off your loan, so you now owe $11814 for the car. Using a similar process, you would owe 0.03* $11814 = $354.42 for the year, so (dividing by 12), you owe $29.54 in interest for the month. This means that of your $216 monthly payment, $29.54 goes toward interest and $186.46 pays down your loan. The values from above are included…

Suppose you have an investment account that earns an annual 9% interest rate, compounded monthly. It took $500 to open the account, so your opening balance is $500. You choose to make fixed monthly payments of $230 to the account each month. Complete the table below to track your savings growth. Months Amount in account (Principal) 9% Interest gained (Remember to divide by 12 for monthly interest) Monthly Payment 1 2 3 $500 $230 $230 $230 $230 + $230 $230 10 6 $230 $230 8 9 $230 $230 10 $230 11 $230 12 What is the total amount gained in interest over this first year of this investment plan?

Answer 2

Question

Chapter 12, Problem 12.31E

a)

To determine

IFRS: International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring a standard global language in accounting, so that the other firms across the globe can understand the accounting term of all other businesses.

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Held-to-maturity security: The debt securities which are held by the investor with the intent to hold the investment till its maturity are referred to as held-to-maturity securities.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other-than-temporary (OTT) impairment: When the market value of an investment declines to a value lower than its cost, it is referred to as OTT impairment. The OTT impairment is considered as permanent loss and the loss is recorded as decrease in net income or earnings.

Unrealized holding gains and losses: These are gains and losses which are unrealized and are the result of changes in cost and fair values of the investment for the period the investment is held.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2016.

b)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

c)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be available for sale securities, as on December 31, 2016.

d)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

e)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be equity investment rather than debt investment, as on December 31, 2017.

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Answer 3

Question

Chapter 12, Problem 12.31E

a)

To determine

IFRS: International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring a standard global language in accounting, so that the other firms across the globe can understand the accounting term of all other businesses.

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Held-to-maturity security: The debt securities which are held by the investor with the intent to hold the investment till its maturity are referred to as held-to-maturity securities.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other-than-temporary (OTT) impairment: When the market value of an investment declines to a value lower than its cost, it is referred to as OTT impairment. The OTT impairment is considered as permanent loss and the loss is recorded as decrease in net income or earnings.

Unrealized holding gains and losses: These are gains and losses which are unrealized and are the result of changes in cost and fair values of the investment for the period the investment is held.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2016.

b)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

c)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be available for sale securities, as on December 31, 2016.

d)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

e)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be equity investment rather than debt investment, as on December 31, 2017.

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Answer 4

Question

Chapter 12, Problem 12.31E

a)

To determine

IFRS: International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring a standard global language in accounting, so that the other firms across the globe can understand the accounting term of all other businesses.

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Held-to-maturity security: The debt securities which are held by the investor with the intent to hold the investment till its maturity are referred to as held-to-maturity securities.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other-than-temporary (OTT) impairment: When the market value of an investment declines to a value lower than its cost, it is referred to as OTT impairment. The OTT impairment is considered as permanent loss and the loss is recorded as decrease in net income or earnings.

Unrealized holding gains and losses: These are gains and losses which are unrealized and are the result of changes in cost and fair values of the investment for the period the investment is held.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2016.

b)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

c)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be available for sale securities, as on December 31, 2016.

d)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

e)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be equity investment rather than debt investment, as on December 31, 2017.

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Answer 5

Chapter 12, Problem 12.31E

a)

To determine

IFRS: International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring a standard global language in accounting, so that the other firms across the globe can understand the accounting term of all other businesses.

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Held-to-maturity security: The debt securities which are held by the investor with the intent to hold the investment till its maturity are referred to as held-to-maturity securities.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other-than-temporary (OTT) impairment: When the market value of an investment declines to a value lower than its cost, it is referred to as OTT impairment. The OTT impairment is considered as permanent loss and the loss is recorded as decrease in net income or earnings.

Unrealized holding gains and losses: These are gains and losses which are unrealized and are the result of changes in cost and fair values of the investment for the period the investment is held.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2016.

b)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

c)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be available for sale securities, as on December 31, 2016.

d)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

e)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be equity investment rather than debt investment, as on December 31, 2017.

Answer 6

Chapter 12, Problem 12.31E

a)

To determine

IFRS: International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring a standard global language in accounting, so that the other firms across the globe can understand the accounting term of all other businesses.

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Held-to-maturity security: The debt securities which are held by the investor with the intent to hold the investment till its maturity are referred to as held-to-maturity securities.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other-than-temporary (OTT) impairment: When the market value of an investment declines to a value lower than its cost, it is referred to as OTT impairment. The OTT impairment is considered as permanent loss and the loss is recorded as decrease in net income or earnings.

Unrealized holding gains and losses: These are gains and losses which are unrealized and are the result of changes in cost and fair values of the investment for the period the investment is held.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2016.

Answer 7

Chapter 12, Problem 12.31E

a)

To determine

IFRS: International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring a standard global language in accounting, so that the other firms across the globe can understand the accounting term of all other businesses.

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Held-to-maturity security: The debt securities which are held by the investor with the intent to hold the investment till its maturity are referred to as held-to-maturity securities.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other-than-temporary (OTT) impairment: When the market value of an investment declines to a value lower than its cost, it is referred to as OTT impairment. The OTT impairment is considered as permanent loss and the loss is recorded as decrease in net income or earnings.

Unrealized holding gains and losses: These are gains and losses which are unrealized and are the result of changes in cost and fair values of the investment for the period the investment is held.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2016.

Answer 8

b)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

Answer 9

b)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

Answer 10

c)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be available for sale securities, as on December 31, 2016.

Answer 11

c)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be available for sale securities, as on December 31, 2016.

Answer 12

d)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

Answer 13

d)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

Answer 14

e)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be equity investment rather than debt investment, as on December 31, 2017.

Answer 15

e)

To determine

To Journalize: The investment made by Company F, in Company J assuming it to be equity investment rather than debt investment, as on December 31, 2017.

Answer 16

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Answer 17

Expert Solution & Answer

Answer 18

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Answer 19

Ch. 12 - Prob. 12.1Q Ch. 12 - When market rates of interest rise after a...Ch. 12 - Does GAAP distinguish between fair values that are...Ch. 12 - When a debt investment is acquired to be held for...Ch. 12 - Prob. 12.5Q Ch. 12 - What is comprehensive income? Its composition...Ch. 12 - Why are holding gains and losses treated...Ch. 12 - Prob. 12.8Q Ch. 12 - Prob. 12.9Q Ch. 12 - Prob. 12.10Q

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

To Journalize: The investment made by Company F, in Company J assuming it to be available for sale securities, as on December 31, 2016.

To Journalize: The investment made by Company F, in Company J assuming it to be held-to-maturity securities, as on December 31, 2017.

To Journalize: The investment made by Company F, in Company J assuming it to be equity investment rather than debt investment, as on December 31, 2017.

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