Question
On July 1, 2019, Barron's Inc. purchased a 3-year, $75,000 bond with a June 30, 2022 maturity date. The bond's stated rate of interest was
On July 1, 2019, Barron's Inc. purchased a 3-year, $75,000 bond with a June 30, 2022 maturity date. The bond's stated rate of interest was 5%, paid semiannually (June 30 and December 31). The bond was purchased at face value for $75,000 and properly reported as a trading security.
The fair market value of the bond purchased by Barron's was $73,500 on December 31, 2019.
1) What was the balance in the Securities Fair Value Adjustment account at December 31, 2019?
2) What was the net dollar impact of the adjustment to the SFVA Adjustment account on 2019 income before income taxes?
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Accounting for Governmental and Nonprofit Entities
Authors: Jacqueline L. Reck, James E. Rooks, Suzanne Lowensohn, Daniel Neely
18th edition
1260190080, 1260190083, 978-1259917059
