Question
On January 1, 2020, A Corp. had the following investments: Classification Investment Market Value Maturity Value Cost Trading K Inc. bonds $1,900 $1,800 Trading S
On January 1, 2020, A Corp. had the following investments:
Classification | Investment | Market Value | Maturity Value | Cost |
Trading | K Inc. bonds | $1,900 | $1,800 | |
Trading | S Co. bonds | 3,100 | 3,000 | |
Held-to-maturity | G Inc. bonds (due 12/31/2022) | $10,000 | 9,700 |
During the year, A Corp. acquired M Co. bonds for $1,000 and classified it as trading. At year-end, the M Co. bonds have fair market value of $1,200. The K Inc. investment on December 31 had a fair market value of $2,500. The S Co. investment had a December 31 market value of $3,500, and the G Inc. bonds had a December 31 market value of $9,850.
Required:
Indicate the balance sheet classification and where unrealized holding gains/losses would appear on the December 31, 2020 financial statements for each investment.
Classification | Balance Sheet Valuation |
Select one (Current Assets, Current Liabilities, Long term Investments, Short term investments) : Trading Securities (at fair value) | $fill in the blank 2 |
Select one (Current Assets, Current Liabilities, Long term Investments, Short term investments) : Held-to-maturity (amortized cost) | $fill in the blank 4 |
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