Ramirez Company has an available-for-sale investment in the 6%, 20-year bonds of Soto Company. The investment was

Question:

Ramirez Company has an available-for-sale investment in the 6%, 20-year bonds of Soto Company. The investment was originally purchased for $1,200,000 in 2009. Early in 2010, Ramirez recorded an impairment of $300,000 on the Soto investment, due to Soto’s financial distress. In 2011, Soto returned to profitability and the Soto investment was no longer impaired. What entry does Ramirez make in 2011 under?

(a) U.S. GAAP and

(b) iGAAP?

Bonds
When companies need to raise money, issuing bonds is one way to do it. A bond functions as a loan between an investor and a corporation. The investor agrees to give the corporation a specific amount of money for a specific period of time in exchange... GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...