Saratoga Company issued bonds with a face value of $300,000 on January 1, 2018, for $306,000. Saratoga
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Saratoga Company issued bonds with a face value of $300,000 on January 1, 2018, for $306,000. Saratoga uses the fair value option to measure the bonds. At the end of 2018, the carrying value of the bonds is $304,702 and their fair value is $301,600. Half of the fair value change relates to investment specific credit risk. What is the entry to record the fair value adjustment?
Face ValueFace value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
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We compare the carrying value to the fair value to obta...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-0134730370
2nd edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
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