Required: Prepare any journal entries required in 2022 to record the securities activity, including any required adjusting entries at 12/31/22. Show any calculations. Show the financial statement presentation for all securities activity during 2022.
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- Weaver Company has the following data at December 31, 2015 for its securities: Securities COST FAIR VALUE Debt Investments - Trading 90,000 87,000 Debt Investments - Available for sale 74,000 75,000 Stock Investments 80,000 76,000 Prepare the adjusting entries to report the securities at fair value. On what financial statement and in what section of that statement would each of the above accounts be reported. (6 all together) a Date Account Title Debit CreditKristopher Company began operations in 2014. At 12/31/22, Kristopher had a debit balance of $25,000 in its Allowance for Adjustment to Market. At January 1, 2022, Kristopher owned the following securities, accounted for using the fair value method. Cost MJO Common (25,000 shares) $550,000 JKH Preferred (1,900 shares) 199,500 EKH Common (7,500 shares) 82,500 During 2022 the following events occurred: 4/3/22 Sold 3,000 shares of MJO for $75,000. 9/6/22 Acquired 1,500 shares of WVO Common for $25 per share. At 12/31/22, the fair values for Kristopher’s securities were: MJO Common, $24 per share JKH Preferred, $103 per share EKH Common, $13 per share WVO Common, $27 per share Required: Prepare any journal entries required in 2022 to record the securities activity, including any required adjusting entries at 12/31/22. Show any calculations.…Pharoah Company has these data at December 31, 2022, the end of its first year of operations. Debt Securities Trading Available-for-sale (a) Cost $119,700 100,300 The available-for-sale securities are held as a long-term investment. Fair Value $125,700 98,300 Prepare the adjusting entries to report: (1) Trading securities at fair value and (2) Available-for-sale securities at fair value. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation (1) Debit Credit
- In its first year of operations, Wildhorse Corporation purchased, available-for-sale debt securities costing $65.000 as a long-term investment. At December 31, 2022, the fair value of the securities is $60,500. Show the financial statement presentation of the securities and related accounts. Assume the securities are noncurrent. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45)) WILDHORSE CORPORATION Balance Sheet 4 $On January 1, 2018 Alexes Company purchased market marketable equity securities to be held as trading for 5,000,000. The entity also paid transaction cost amounting to P 200 000. The securities had a market value of 5 500 000 on December 31, 2018 and the transaction cost that would be incurred on sale is estimated at 100 000. No securities were sold in 2018. What amount of unrealized gain or loss on these securities should be reported in the 2018 income statement?Lexington Co. has the following securities outstanding on December 31, 2017 (its first year of operations). Cost Fair Value Greenspan Corp. stock $20,000 $19,000 Summerset Company stock 9,500 8,800 Tinkers Company stock 20,000 20,600 $49,500 $48,400 During 2018, Summerset Company stock was sold for $9,200, the difference between the $9,200 and the “fair value” of $8,800 being recorded as a “Gain on Sale of Investments.” The market price of the stock on December 31, 2018, was Greenspan Corp. stock $19,900; Tinkers Company stock $20,500.Instructions(a) What justification is there for valuing equity securities at fair value and reporting the unrealized gain or loss as part of net income?(b) How should Lexington Co. report this information in its financial statements at December 31, 2017? Explain.(c) Did Lexington Co. properly account for the sale of the Summerset Company stock? Explain.(d) Are there any additional entries necessary for Lexington Co. at December 31,…
- On April 1, 2024, Sunland Company purchased 44,800 common shares in Ecotown Ltd. for $13 per share. Management has designated the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $15 per share on December 31. Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Account Titles く Debit CreditPresented below is selected information related to the financial instruments of Pronghorn Company at December 31, 2020. This is Pronghorn Company’s first year of operations. CarryingAmount Fair Value(at December 31) Investment in debt securities (intent is to hold to maturity) $42,700 $43,600 Investment in Chen Company stock 848,500 952,100 Bonds payable 237,600 213,400 (a) Pronghorn elects to use the fair value option for these investments. Assuming that Pronghorn’s net income is $106,200 in 2020 before reporting any securities gains or losses, determine Pronghorn’s net income for 2020. Assume that the difference between the carrying value and fair value is due to credit deterioration. Pronghorn’s net income for 2020 $ (b) Record the journal entry, if any, necessary at December 31, 2020, to record the fair value option for the bonds payable. (Credit account titles are automatically indented when amount is entered. Do not indent manually.…On April 1, 2024, Sandhill Company purchased 46,400 common shares in Ecotown Ltd. for $13 per share. Management has designated the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $15 per share on December 31. Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Save for Later Account Titles Debit Credit Attempts: 0 of 1 used Submit Answer
- On April 1, 2024, Sheridan Company purchased 34,400 common shares in Ecotown Ltd. for $18 per share. Management has designated the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $20 per share on December 31. Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries) Date 10 Account Titles Debit CreditAt December 31, 2022, the trading debt securities for Sheridan, Inc. are as follows. Security A (a) B C Cost $17,800 12,000 Dec. 31 22,900 $52,700 Fair Value $16,300 13,600 19,400 $49,300 Prepare the adjusting entry at December 31, 2022, to report the securities at fair value. (List all debit entries before credit er Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No- for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit CreditPresented below is selected information related to the financial instruments of Novak Company at December 31, 2025. This is Novak Company's first year of operations. Carrying Amount Fair Value (at December 31) Investment in debt securities (intent is to hold to maturity) $42,600 $43,500 Investment in Chen Company stock 737,000 856,500 Bonds payable 241,500 217,100 (a) Novak elects to use the fair value option for these investments. Assuming that Novak's net income is $108,000 in 2025 before reporting any securities gains or losses, determine Novak's net income for 2025. Assume that the difference between the carrying value and fair value is due to credit deterioration. Novak's net income for 2025 $ 228,400 (b) Record the journal entry, if any, necessary at December 31, 2025, to record the fair value option for the bonds payable. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is…