2) At the beginning of 2018, Ace Company had the following portfolio of investme
ID: 2327984 • Letter: 2
Question
2) At the beginning of 2018, Ace Company had the following portfolio of investments in available-for-sale debt securities (all of which were acquired at par value):
During 2018, the following transactions occurred:
Required:
3. Next Level What justification does the FASB give for its treatment of unrealized holding gains and losses for available-for-sale securities?
3) On January 1, 2016, Crouser Company sold land to Chad Company, accepting a 2-year, $150,000, non-interest-bearing note due January 1, 2018. The fair value of the land was $126,252.00 on the date of sale. Crouser purchased the land for $105,000 on January 1, 2010. Required: Prepare all the journal entries on Crouser’s books for January 1, 2016, through January 1, 2018, in regard to the Chad note.
Security Cost 1/1/18 Fair Value A $45,000 $56,000 B 68,000 65,000 Totals $113,000 $121,000Explanation / Answer
Jan-1-16 Notes receivable 150000 Land 105000 Gain on sale of Land 21252 =126252-105000 Discount on notes receivable 23748 Dec-31-17 Discount on notes receivable 11874 =23748/2 Inetest revenue 11874 Dec-31-18 Discount on notes receivable 11874 Inetest revenue 11874 Jan-1-18 Cash 150000 Notes receivable 150000
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