Question
Loreal-American Corporation purchased several marketable securities during 2024. At December 31, 2024, the company had the investments in bonds listed below. None was held at
Loreal-American Corporation purchased several marketable securities during 2024. At December 31, 2024, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2023, and all are considered securities available-for-sale.
| Cost | Fair Value | Unrealized Holding Gain (Loss) | |
|---|---|---|---|
| Short term: | |||
| Blair, Incorporated | $ 480,000 | $ 405,000 | $ (75,000) |
| ANC Corporation | 450,000 | 480,000 | 30,000 |
| Totals | $ 930,000 | $ 885,000 | $ (45,000) |
| Long term: | |||
| Drake Corporation | $ 480,000 | $ 560,000 | $ 80,000 |
| Aaron Industries | 720,000 | 660,000 | (60,000) |
| Totals | $ 1,200,000 | $ 1,220,000 | $ 20,000 |
Required:
- Prepare appropriate adjusting entry at December 31, 2024.
- What amount would be reported in the income statement at December 31, 2024, as a result of the adjusting entry?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Essentials Of Accounting
Authors: Robert N. Anthony, Leslie Pearlman Breitner
9th Edition
013149693X, 9780131496934
