Question
Loreal-American Corporation purchased several marketable securities during 2021. At December 31, 2021, the company had the investments in bonds listed below. None was held at
Loreal-American Corporation purchased several marketable securities during 2021. At December 31, 2021, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2020, and all are considered securities available-for-sale.
| Cost | Fair Value | Unrealized Holding Gain (Loss) | ||||||||||
| Short term: | ||||||||||||
| Blair, Inc. | $ | 520,000 | $ | 385,000 | $ | (135,000 | ) | |||||
| ANC Corporation | 470,000 | 520,000 | 50,000 | |||||||||
| Totals | $ | 990,000 | $ | 905,000 | $ | (85,000 | ) | |||||
| Long term: | ||||||||||||
| Drake Corporation | $ | 520,000 | $ | 580,000 | $ | 60,000 | ||||||
| Aaron Industries | 700,000 | 680,000 | (20,000 | ) | ||||||||
| Totals | $ | 1,220,000 | $ | 1,260,000 | $ | 40,000 | ||||||
Required: 1. Prepare appropriate adjusting entries at December 31, 2021. 2. What amount would be reported in the income statement at December 31, 2021, as a result of the adjusting entry?
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Financial Accounting 101 An Investment In Knowledge Pays The Best Interest Benjamin Franklin
Authors: Daniel Arellano
1st Edition
979-8633540260
