
(a)
Introduction:
Classification of Long term investments
Long term investments are capital intensive purchases of financial assets such as shares and stocks, bonds and debentures, property, land etc. that the company acquires with intent to retain the investments for a period exceeding one year or more.
There are four primary categories of long term investments:
- Held to Maturity Investments − They represent investments that the company intends to hold till the maturity of such instrument. It includes debt securities such as bonds.
- Available for sale Investments − They represent investments that the company intends to hold for a period exceeding one year but with an intention to sell at the best available opportunity in the foreseeable future.
- Significant Interest in Other companies − They represent investments made by a company in equity securities such as shares and stocks, of another company, usually in the range of 25 % − 50 % of the outstanding equity shares of the other company.
- Controlling Interest in Other companies - They represent investments made by a company in equity securities such as shares and stocks, of another company, usually in the range of 51 % or higher of the outstanding equity shares of the other company.
To Prepare:
Transactional data for acquisition of various types of long term securities
(b)
Introduction:
Classification of Long term investments
Long term investments are capital intensive purchases of financial assets such as shares and stocks, bonds and debentures, property, land etc. that the company acquires with intent to retain the investments for a period exceeding one year or more.
There are four primary categories of long term investments:
- Held to Maturity Investments − They represent investments that the company intends to hold till the maturity of such instrument. It includes debt securities such as bonds.
- Available for sale Investments − They represent investments that the company intends to hold for a period exceeding one year but with an intention to sell at the best available opportunity in the foreseeable future.
- Significant Interest in Other companies − They represent investments made by a company in equity securities such as shares and stocks, of another company, usually in the range of 25 % − 50 % of the outstanding equity shares of the other company.
- Controlling Interest in Other companies - They represent investments made by a company in equity securities such as shares and stocks, of another company, usually in the range of 51 % or higher of the outstanding equity shares of the other company.
- Journal entries are the first step in recording financial transactions and preparation of financial statements.
- These represent the impact of the financial transaction and demonstrate the effect on the accounts impacted in the form of debits and credits.
- Assets and expenses have debit balances and Liabilities and Incomes have credit balances and according to the business transaction, the accounts are appropriately debited will be credited by credited to reflect the effect of business transactions and events.
To Prepare:
Journal entries for acquisition of the long term investments.
(c)
Introduction:
Classification of Long term investments
Long term investments are capital intensive purchases of financial assets such as shares and stocks, bonds and debentures, property, land etc. that the company acquires with intent to retain the investments for a period exceeding one year or more.
There are four primary categories of long term investments:
- Held to Maturity Investments − They represent investments that the company intends to hold till the maturity of such instrument. It includes debt securities such as bonds.
- Available for sale Investments − They represent investments that the company intends to hold for a period exceeding one year but with an intention to sell at the best available opportunity in the foreseeable future.
- Significant Interest in Other companies − They represent investments made by a company in equity securities such as shares and stocks, of another company, usually in the range of 25 % − 50 % of the outstanding equity shares of the other company.
- Controlling Interest in Other companies - They represent investments made by a company in equity securities such as shares and stocks, of another company, usually in the range of 51 % or higher of the outstanding equity shares of the other company.
Information needed to complete period end closing for the long term investments
(d)
Introduction:
Classification of Long term investments
Long term investments are capital intensive purchases of financial assets such as shares and stocks, bonds and debentures, property, land etc. that the company acquires with intent to retain the investments for a period exceeding one year or more.
There are four primary categories of long term investments:
- Held to Maturity Investments − They represent investments that the company intends to hold till the maturity of such instrument. It includes debt securities such as bonds.
- Available for sale Investments − They represent investments that the company intends to hold for a period exceeding one year but with an intention to sell at the best available opportunity in the foreseeable future.
- Significant Interest in Other companies − They represent investments made by a company in equity securities such as shares and stocks, of another company, usually in the range of 25 % − 50 % of the outstanding equity shares of the other company.
- Controlling Interest in Other companies - They represent investments made by a company in equity securities such as shares and stocks, of another company, usually in the range of 51 % or higher of the outstanding equity shares of the other company.
- Journal entries are the first step in recording financial transactions and preparation of financial statements.
- These represent the impact of the financial transaction and demonstrate the effect on the accounts impacted in the form of debits and credits.
- Assets and expenses have debit balances and Liabilities and Incomes have credit balances and according to the business transaction, the accounts are appropriately debited will be credited by credited to reflect the effect of business transactions and events.
Journal Entries
To Prepare:
Year end closing entries for long term investments
(e)
Introduction:
Classification of Long term investments
Long term investments are capital intensive purchases of financial assets such as shares and stocks, bonds and debentures, property, land etc. that the company acquires with intent to retain the investments for a period exceeding one year or more.
There are four primary categories of long term investments:
- Held to Maturity Investments − They represent investments that the company intends to hold till the maturity of such instrument. It includes debt securities such as bonds.
- Available for sale Investments − They represent investments that the company intends to hold for a period exceeding one year but with an intention to sell at the best available opportunity in the foreseeable future.
- Significant Interest in Other companies − They represent investments made by a company in equity securities such as shares and stocks, of another company, usually in the range of 25 % − 50 % of the outstanding equity shares of the other company.
- Controlling Interest in Other companies - They represent investments made by a company in equity securities such as shares and stocks, of another company, usually in the range of 51 % or higher of the outstanding equity shares of the other company.
To Prepare:
Balance Sheet Section depicting long term investments

Want to see the full answer?
Check out a sample textbook solution
Chapter 15 Solutions
FUND.ACCT.PRIN.(LOOSELEAF)
- Give solution correctly no chatgptarrow_forwardProblem No. 1 On January 1, 2025, Manuel Cruz and Sherimae Diasalo agreed to form a partnership that will manufacture and sell biscuits. The partnership agreement specified that Cruz is to invest cash of P1,000,000 and Diasalo is to contribute land and building to serve as the office and factory of the business. The following amounts are applicable to the property of Diasalo: Acquisition Cost Fair Market Value Land Building P1,000,000 500,000 P1,500,000 850,000 During the formation, it was found out that Cruz has accounts receivable amounting to P70,000 and the partners agreed that it will be assumed by the partnership. The name of the partnership will be Fita Pan. Required: 1. Prepare journal entry to record: a. The investment of Cruz to the partnership b. The investment of Diasalo to the partnershipood relay ni 000,219 2. Prepare the statement of financial position of the partnership as of January 1, 2025 Problem No. 2 The trial balance of Cleint Lumanao Nacho Supplies on February…arrow_forwardA company's stock price is $80, with earnings per share (EPS) of $10 and an expected growth rate of 12%.arrow_forward
- Kazama owns JKL Corporation stock with a basis of $20,000. He exchanges this for $24,000 of STU stock and $8,000 of STU securities as part of a tax-free reorganization. What is Kazama's basis in the STU stock?arrow_forwardKensington Textiles, Inc. manufactures customized tablecloths. An experienced worker can sew and embroider 10 tablecloths per hour. Due to the repetitive nature of the work, employees take a 10-minute break after every 10 tablecloths. Additionally, before starting each batch of 10 tablecloths, workers spend 8 minutes cleaning and setting up their sewing machines. Calculate the standard quantity of direct labor for one tablecloth.arrow_forwardSolvearrow_forward
- Problem: The bank statement balance of $7,000 does not include a check outstanding of $1,000, a deposit in transit of $275, and another company's $250 check erroneously charged against your firm's account. The reconciled bank balance is__?arrow_forwardGiven step by step explanation general accounting questionarrow_forwardQuick answer of this accounting questionsarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





