Chapter H, Problem 10P

(a)

To determine

Debt investments: It refers to the investments made in debts by the investor for which it lends funds to the borrowing company at a predetermined interest and the debt amount is repaid on the maturity date. For example, corporate bonds, government bonds, certificate of deposits.

Stock Investments: It refers to the investment in a financial instrument known as stock that, gives the right of ownership to an investor equal to the amount invested in the company. Thus, it enables a stockholder to claim in the profits and the assets of the company.

To Record: The transactions and post to the accounts Debt Investments and Stock Investments.

(b)

To determine

To Prepare: The adjusting entry to report the investments at fair value at December 31, 2019.

(c)

To determine

To Prepare: The investments section of balance sheet of Company N.

(d)

To determine

To Identify: The income statement accounts and present the statement classification of each account.