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Business Accounting Financial and Managerial Accounting

Long-Term Investment in Debt Securities: The long term investments in debt securities is the pooling of funds by the investors in the debt instruments which are to be matured minimum after one year and includes bonds and various types of debt instruments which are subject to amortization with respect to their premiums and discounts. The principal amount of funds employed in such debt securities are payable as the end result of the operating cycle or one year, whichever span is longer. To determine: The circumstances where long-term investments in debt securities reported at cost and adjusted for amortization of difference between cost and maturity value. Solution: The long-term investment in debt securities in the form of held-to maturity securities are reported at cost at the time of purchase. The held-to maturity securities are basically non derivative assets which are popularly in the form of bonds and investments which get matured after a time period of at least one year or more. The income generated in the form of interest is recorded as and when it is earned. The held-to maturity securities are recorded in the balance sheet at its amortized value after deducting the impairment costs without any fair value adjustments, irrespective of the portfolio being short-term or long-term. The interest earned from these securities form part of income statement of the firm, on the other hand the difference between the cost and maturity values form part of combined comprehensive income till they are ultimately realized.

Long-Term Investment in Debt Securities: The long term investments in debt securities is the pooling of funds by the investors in the debt instruments which are to be matured minimum after one year and includes bonds and various types of debt instruments which are subject to amortization with respect to their premiums and discounts. The principal amount of funds employed in such debt securities are payable as the end result of the operating cycle or one year, whichever span is longer. To determine: The circumstances where long-term investments in debt securities reported at cost and adjusted for amortization of difference between cost and maturity value. Solution: The long-term investment in debt securities in the form of held-to maturity securities are reported at cost at the time of purchase. The held-to maturity securities are basically non derivative assets which are popularly in the form of bonds and investments which get matured after a time period of at least one year or more. The income generated in the form of interest is recorded as and when it is earned. The held-to maturity securities are recorded in the balance sheet at its amortized value after deducting the impairment costs without any fair value adjustments, irrespective of the portfolio being short-term or long-term. The interest earned from these securities form part of income statement of the firm, on the other hand the difference between the cost and maturity values form part of combined comprehensive income till they are ultimately realized.

Financial and Managerial Accounting

Financial and Managerial Accounting

7th Edition

ISBN: 9781259726705

Author: John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher: McGraw-Hill Education

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Chapter C, Problem 8DQ

Chapter C, Problem 10DQ

Chapter C Solutions

Financial and Managerial Accounting

Ch. C - Prob. 1MCQ Ch. C - Prob. 2MCQ Ch. C - Prob. 3MCQ Ch. C - Prob. 4MCQ Ch. C - Prob. 5MCQ Ch. C - Prob. 1DQ Ch. C - Prob. 2DQ Ch. C - Prob. 3DQ Ch. C - Prob. 4DQ Ch. C - Prob. 5DQ

Ch. C - Prob. 6DQ Ch. C - Prob. 7DQ Ch. C - Prob. 8DQ Ch. C - Prob. 9DQ Ch. C - Prob. 10DQ Ch. C - Prob. 11DQ Ch. C - Prob. 12DQ Ch. C - Prob. 13DQ Ch. C - Prob. 14DQ Ch. C - Prob. 1QS Ch. C - Prob. 2QS Ch. C - Prob. 3QS Ch. C - Prob. 4QS Ch. C - Prob. 5QS Ch. C - Prob. 6QS Ch. C - Prob. 7QS Ch. C - Prob. 8QS Ch. C - Prob. 9QS Ch. C - Prob. 10QS Ch. C - Prob. 11QS Ch. C - Prob. 12QS Ch. C - Prob. 13QS Ch. C - Prob. 14QS Ch. C - Prob. 15QS Ch. C - International accounting for investments P1 The...Ch. C - Prob. 1E Ch. C - Prob. 2E Ch. C - Prob. 3E Ch. C - Prob. 4E Ch. C - Prob. 5E Ch. C - Exercise C-6 Transactions in short-term and...Ch. C - Prob. 7E Ch. C - Prob. 8E Ch. C - Prob. 9E Ch. C - Prob. 10E Ch. C - Prob. 11E Ch. C - Prob. 12E Ch. C - Prob. 13E Ch. C - Prob. 14E Ch. C - Prob. 15E Ch. C - Prob. 1PSA Ch. C - Prob. 2PSA Ch. C - Prob. 3PSA Ch. C - Prob. 4PSA Ch. C - Prob. 5PSA Ch. C - Prob. 1PSB Ch. C - Prob. 2PSB Ch. C - Prob. 3PSB Ch. C - Prob. 4PSB Ch. C - Prob. 5PSB Ch. C - Prob. 1SP Ch. C - Prob. 1GLP Ch. C - Prob. 2GLP Ch. C - Prob. 1BTN Ch. C - Prob. 2BTN Ch. C - Prob. 3BTN Ch. C - Prob. 4BTN Ch. C - Prob. 5BTN Ch. C - Prob. 6BTN Ch. C - Prob. 7BTN Ch. C - Prob. 8BTN

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