Held-to-Maturity Investments: The investments when purchased are required to be classified on the basis of factors include – a. Intent to hold investment b. Length of time i.e. till maturity. When it is given that the investment has been purchased with the intent to hold till maturity it is considered as Held-to-maturity investment. The journal entries on the purchase of Held-tomaturity investment and on the receipt of interest revenue on the Held-tomaturity investments are as follows – Date Accounts Titles and Descriptions Debit (Amount in $) Credit (Amount in $) Long term investment - Held-tomaturity Cash (To record purchase of held-to-maturity investment) Cash Interest Revenue (To record interest received on held-to-maturity investment) Correct option for recording the interest revenue received on bond investment.

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Answer 1

Question

Chapter 15, Problem 3QC

To determine

Concept introduction:

Held-to-Maturity Investments:

The investments when purchased are required to be classified on the basis of factors include –

a. Intent to hold investment

b. Length of time i.e. till maturity.

When it is given that the investment has been purchased with the intent to hold till maturity it is considered as Held-to-maturity investment.

The journal entries on the purchase of Held-tomaturity investment and on the receipt of interest revenue on the Held-tomaturity investments are as follows –

Date Accounts Titles and Descriptions Debit (Amount in $) Credit (Amount in $)

Long term investment - Held-tomaturity

Cash

(To record purchase of held-to-maturity investment)

Cash

Interest Revenue

(To record interest received on held-to-maturity investment)

Correct option for recording the interest revenue received on bond investment.

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Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's assets, Liabilities, and Equity?

Answer 2

Question

Chapter 15, Problem 3QC

To determine

Concept introduction:

Held-to-Maturity Investments:

The investments when purchased are required to be classified on the basis of factors include –

a. Intent to hold investment

b. Length of time i.e. till maturity.

When it is given that the investment has been purchased with the intent to hold till maturity it is considered as Held-to-maturity investment.

The journal entries on the purchase of Held-tomaturity investment and on the receipt of interest revenue on the Held-tomaturity investments are as follows –

Date Accounts Titles and Descriptions Debit (Amount in $) Credit (Amount in $)

Long term investment - Held-tomaturity

Cash

(To record purchase of held-to-maturity investment)

Cash

Interest Revenue

(To record interest received on held-to-maturity investment)

Correct option for recording the interest revenue received on bond investment.

Expert Solution & Answer

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Answer 3

Question

Chapter 15, Problem 3QC

To determine

Concept introduction:

Held-to-Maturity Investments:

The investments when purchased are required to be classified on the basis of factors include –

a. Intent to hold investment

b. Length of time i.e. till maturity.

When it is given that the investment has been purchased with the intent to hold till maturity it is considered as Held-to-maturity investment.

The journal entries on the purchase of Held-tomaturity investment and on the receipt of interest revenue on the Held-tomaturity investments are as follows –

Date Accounts Titles and Descriptions Debit (Amount in $) Credit (Amount in $)

Long term investment - Held-tomaturity

Cash

(To record purchase of held-to-maturity investment)

Cash

Interest Revenue

(To record interest received on held-to-maturity investment)

Correct option for recording the interest revenue received on bond investment.

Expert Solution & Answer

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Answer 4

Question

Chapter 15, Problem 3QC

To determine

Concept introduction:

Held-to-Maturity Investments:

The investments when purchased are required to be classified on the basis of factors include –

a. Intent to hold investment

b. Length of time i.e. till maturity.

When it is given that the investment has been purchased with the intent to hold till maturity it is considered as Held-to-maturity investment.

The journal entries on the purchase of Held-tomaturity investment and on the receipt of interest revenue on the Held-tomaturity investments are as follows –

Date Accounts Titles and Descriptions Debit (Amount in $) Credit (Amount in $)

Long term investment - Held-tomaturity

Cash

(To record purchase of held-to-maturity investment)

Cash

Interest Revenue

(To record interest received on held-to-maturity investment)

Correct option for recording the interest revenue received on bond investment.

Expert Solution & Answer

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Answer 5

Chapter 15, Problem 3QC

To determine

Concept introduction:

Held-to-Maturity Investments:

The investments when purchased are required to be classified on the basis of factors include –

a. Intent to hold investment

b. Length of time i.e. till maturity.

When it is given that the investment has been purchased with the intent to hold till maturity it is considered as Held-to-maturity investment.

The journal entries on the purchase of Held-tomaturity investment and on the receipt of interest revenue on the Held-tomaturity investments are as follows –

Date Accounts Titles and Descriptions Debit (Amount in $) Credit (Amount in $)

Long term investment - Held-tomaturity

Cash

(To record purchase of held-to-maturity investment)

Cash

Interest Revenue

(To record interest received on held-to-maturity investment)

Correct option for recording the interest revenue received on bond investment.

Answer 6

Chapter 15, Problem 3QC

To determine

Concept introduction:

Held-to-Maturity Investments:

The investments when purchased are required to be classified on the basis of factors include –

a. Intent to hold investment

b. Length of time i.e. till maturity.

When it is given that the investment has been purchased with the intent to hold till maturity it is considered as Held-to-maturity investment.

The journal entries on the purchase of Held-tomaturity investment and on the receipt of interest revenue on the Held-tomaturity investments are as follows –

Date Accounts Titles and Descriptions Debit (Amount in $) Credit (Amount in $)

Long term investment - Held-tomaturity

Cash

(To record purchase of held-to-maturity investment)

Cash

Interest Revenue

(To record interest received on held-to-maturity investment)

Correct option for recording the interest revenue received on bond investment.

Answer 7

Chapter 15, Problem 3QC

To determine

Concept introduction:

Held-to-Maturity Investments:

The investments when purchased are required to be classified on the basis of factors include –

a. Intent to hold investment

b. Length of time i.e. till maturity.

When it is given that the investment has been purchased with the intent to hold till maturity it is considered as Held-to-maturity investment.

The journal entries on the purchase of Held-tomaturity investment and on the receipt of interest revenue on the Held-tomaturity investments are as follows –

Date Accounts Titles and Descriptions Debit (Amount in $) Credit (Amount in $)

Long term investment - Held-tomaturity

Cash

(To record purchase of held-to-maturity investment)

Cash

Interest Revenue

(To record interest received on held-to-maturity investment)

Correct option for recording the interest revenue received on bond investment.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 15 - Prob. 1QC Ch. 15 - Which of the following investments is most likely...Ch. 15 - Prob. 3QC Ch. 15 - A company invested $45,000 in Yale Co. stock. The...Ch. 15 - Prob. 5QC Ch. 15 - Prob. 6QC Ch. 15 - Prob. 7QC Ch. 15 - Prob. 8QC Ch. 15 - Prob. 9QC Ch. 15 - Prob. 10QC

Date	Accounts Titles and Descriptions	Debit (Amount in $)	Credit (Amount in $)
	Long term investment - Held-tomaturity
	Cash
	(To record purchase of held-to-maturity investment)

	Cash
	Interest Revenue
	(To record interest received on held-to-maturity investment)

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