On January 12, 2024, Jefferson Corporation purchased bonds of Rose Corporation for $75 million at par and classified the securities as available-for-s Smith buys and sells equity securities. On December 15, 2024. Smith purchased $545,000 of Jones shares and elected the fair value option to account On December 31, 2024, these bonds were valued at $68 million. Nine months later, on October 3, 2025, Jefferson Corporation sold these bonds for $8 for the Jones investment. As of December 31, 2024, the Jones shares had a fair value of $593,000. In the 2024 financial statements, Smith will report (ignore taxes): As part of the multistep approach to record the 2025 transaction with a gain of : - Multiple Choice Multiple Choice O Investment income of $48,000 in its income statement. $18 million. other comprehensive income of $48,000. $25 million. O we income of $593,000. $1 milion O an investment in Jones of $545,000. if an available-for-sale debt investment is sold for which there are unrealized holding gains in accumulated other comprehensive income (AOCI). a reclassification adjustment affects other comprehensive income (OCI) in the period of sale by. Several years ago, Cayuga Capital acquired a $1 million insurance policy on the life of its chief executive officer, naming Cayuga Capital as beneficiary. Annual premiums are $20,000, payable at the beginning of each year. In 2024, the cash surrender value of the policy increased from $12,000 to $15,000 according to the contract. Cayuga's journal entry to record payment of the insurance premium in 2024 would include a: Multiple Choice Multiple Choice O Increasing OCI for the amount of unrealized holding gains in AOCL debit to cash of $20,000. No effect on OCI, as OCI only includes the effects of unre holding gains and losses. O credit to surrender value revenu Reducing OCI for the amount O debit to insurance expense of $17,000. O) No effect on OCI, as the realized gain is included in AOCI. debit to cash surrender value of life insurance of $15,000. ding voting common stock of Gold Company for $300,750. The book value of the On January 1, 2024, Green Corporation purchased 30% of the outstorehousebigsean intangible asset on Gold's books that acquired shares was $275,450. The excess of cost over book value is at 's books that was undervalued and had a remaining useful life of five years. For the year ended December 31, 2024, Gold reported net income of $125,950 and paid cash dividends of $25,750. Nichols Enterprises has an investment in 250 bonds of Elliott Electronics that Nichols accounts for as a security available-for sale ity available-for-sale. Elliott bonds are What is the carrying value of Green's investment in Gold at December 31, 20247 publicly traded, and The Wall Street Journal quotes a price for those bonds of $1,000 per bond, but Nichols believes the market has not appreciated the full value of the Elliott bonds and that a more accurate price is $1,200 per bond. Nichols should carry the Ell 00 per bond carry the Elliott investment on its balance sheet at: Multiple Choice - Multiple Choice $325.750 Either $250,000 or $300,000, as either are defensit $300750 O $275,000, the midpoint of Nichols's range of reasonably likely valuations of Ellon. $293,025 $250,000. $330,810 $300,090
