9th Edition

ISBN: 9781259722660

Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher: McGraw-Hill Education

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Chapter 12, Problem 12.9E

Securities available-for-sale; adjusting entries

• LO12-4

Loreal-American Corporation purchased several marketable securities during 2018. At December 31, 2018, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2017, and all are considered securities available-for-sale.

Chapter 12, Problem 12.9E, Securities available-for-sale; adjusting entries LO12-4 Loreal-American Corporation purchased

Required:

1. Prepare appropriate adjusting entries at December 31, 2018.

2. What amounts would be reported in the income statement at December 31, 2018, as a result of these adjusting entries?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Chapter 12, Problem 12.8E

Chapter 12, Problem 12.10E

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Chapter 12 Solutions

Intermediate Accounting

Ch. 12 - All investments in debt securities are classified...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

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Solution Summary: The author explains that available-for-sale (AFS) securities are short-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes.

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