. 178 22 (Part teve indigo Company has the following iestments as of December 31

Question

. 178 22 (Part teve indigo Company has the following iestments as of December 31, 2017 ,00o Investments in common stock of Laser Comgany$1,580 Investmere in debe securities of Foursquare Compay $3,220,000 insven on th·opndios of laser Forsame are vaksed t oma rwand art both netrert, the carrying ,ale aid the lw value of these tw. inwestment, are the same at Decenter 31, 2017. hdge s seotk mestments dees Company ryAt December 31, 2018,the shares n Laser Company are valued at $1,140,000, the delt wrvestrn" securities

Explanation / Answer

a. Prepare the journal entries to record the impairment of these two securities at December 31, 2018 Date Particulars Debit Credit 12/31/2018 Loss on investment in Laser Company $440,000 Investment in Laser Company $440,000 (Recorded Impairment loss in Investments in common stock of Laser Company) Loss on investments in FourSquare Company $820,000 Investments in FourSquare Company $820,000 (Recorded Impairment loss in Investments in Debt Securities of FourSquare Company) b. Assuming the fair value of the Laser shares is $1,580,000 and the value of its debt instrument is $2,840,000, what entries, if any, should be recorded in 2019 related to impairment? Date Particulars Debit Credit 12/31/2019 Loss on investment in Laser Company $0 Investment in Laser Company $0 (Recorded Impairment loss in Investments in common stock of Laser Company) Loss on investments in FourSquare Company $380,000 Investments in FourSquare Company $380,000 (Recorded Impairment loss in Investments in Debt Securities of FourSquare Company)

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