Chapter 17, Problem 7Q

To determine

Debt securities: Debt security is money borrowed at a specific rate of interest which must be repaid by maturity date. The amount to be repaid is predetermined.

Trading securities: Debt securities which are held with the intention to sell in the short term for profit are called trading securities.

Available-for-sale securities: A debt or equity securities which are purchased with the intention of selling it before its maturity, or selling prior to the longest time period in case if security is without its maturity are available-for-sale securities.

Held-to-maturity:Held-to-maturity securities, states that securities are purchased with an intention of holding it till maturity.

Fair value: Fair value is a selling price which is agreed by the buyer and seller. It is also the estimate of the potential market price of good, service or asset.

To determine the reporting value of Trading, Available-for-sale and Held-to-maturity on the balance sheet.