Question
Let me tell you, the soultions in this website are incorrect (WRONG) please don't provide me a answer the same from this website. This is
Let me tell you, the soultions in this website are incorrect (WRONG) please don't provide me a answer the same from this website. This is 3rd time I have to post the same question again and again to get and correct answer.
I can list all the wrong answers here:
GL 1 (WRONG)
OTT impairment Loss-NI 450,000 (wrong)
Discount on bonds investment 450,000 (wrong)
GL 2
OTT loss-OCI or Fair value adjustment 250,00 or 100,000 or 200,00 (wrong)
Unrealized holding gain-OIC or Fair value adjustmnet (wrong)
Effect
Income statement $450,000 or $200,000 or 250,000 (all wrong)
Net effect on comprehensive income 350,000 or 150,000 or 200,000 (all wrong)
If put any of these above answer, you don't have to answer this question = you don't know .
thanks,
Brief Exercise 12-17 Available-for-sale securities and impairment (Appendix 12B) L012-4, 12-8] LED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securities available-for-sale. The market price of Branch's bonds fell by $450,000, due to concerns about one of the company's principal drugs. The concerns were justified when the FDA banned the drug. $100,000 of that decline in value already had been included in OCI as a temporary unrealized loss in a prior period. LED views $200,000 of the $450,000 loss as related to credit losses, and the other $250,000 as noncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers What journal entries should LED record to account for the decline in market value in the current period? How should the decline affect net income and comprehensive income? Complete this question by entering your answers in the tabs below Journal entry worksheet 2 d? (If no entry is Record the entry for reclassification adjustment. Note: Enter debits before credits. Event General Journal Debit Credit Record the entry for credit losses Note: Enter debits before credits. Event General Journal Debit Credit General Journal Effect How should the decline affect net income and comprehensive income? (Negative amounts should be entered with minus sign.) Effect Income statement Other comprehensive income Net effect on comprehensive income $ 100,000
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