Solution-Determine dawsons net income for 2012

Determine dawsons net income for 2012

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Reference no: EM13553565

Presented below is selected information related to the financial instruments of Dawson Company at December 31, 2012. This is Dawson Company's first year of operations.

	Carrying Amount	Fair Value (at December 31)
Investment in debt securities (intent is to hold to maturity)	$ 40,000	$ 41,000
Investment in Chen Company stock	800,000	910,000
Bonds payable	220,000	195,000

Instructions

(a) Dawson elects to use the fair value option whenever possible. Assuming that Dawson's net income is $100,000 in 2012 before reporting any securities gains or losses, determine Dawson's net income for 2012.

(b) Record the journal entry, if any, necessary at December 31, 2012, to record the fair value option for the bonds payable.

Reference no: EM13553565

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Determine dawsons net income for 2012

Reference no: EM13553565

Reference no: EM13553565

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