Concept Introduction:
Investment in Debt securities: Debt securities are financing instrument which represents the loan taken from lender and usually these securities pay defined interest rate on the amount borrowed. The several types of debt instruments are bonds, certificate of deposits,
1. Held to maturity: Held to maturity is a type of debt investment that the investor intends to hold till maturity. These securities are recorded at amortized cost.
2. Trading: Trading securities are purchased by the investor for the purpose to sell within a short term period to each profit. These securities are recorded at their fair value and any gain or loss in recognized in the income statement for that period.
3. Available for sale: All the other securities are considered as available for sale and these securities are recorded at their fair value and any gain or loss is recognized unrealized gain or loss until the securities are actually sold.
To indicate: The recording of gain or loss on sale on disposing off an available for sale debt investment
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Chapter 15 Solutions
Horngren's Accounting
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- I need help with this general accounting question using standard accounting techniques.arrow_forwardProvide right answerarrow_forwardOn August 1, the accounts receivable account balance of Jenson Corp was $84,200. During August, $312,000 was collected from customers on account. Assuming the August 31 balance was $81,600, determine the fees billed to customers on account during August.arrow_forward
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