Determined to be other than temporary

Assignment Help Financial Accounting

Reference no: EM13137596

(Impairment of Debt Securities)

Cairo Corporation has municipal bonds classified as available-for-sale at December 31, 2010. These bonds have a par value of $822,000, an amortized cost of $822,000 and a fair value of $760,350. The unrealized loss of $61,650 previously recognized as other comprehensive income and as a separate component of stockholders' equity is now determined to be other than temporary. That is, the company believes that impairment accounting is now appropriate for these bonds.

(a) Prepare the journal entry to recognize the impairment.

Reference no: EM13137596

Questions Cloud

New equipments for pay-back period : This equipment replaces old equipment that was sold for $10,000 cash. Ignoring income taxes, the new equipments has a pay-back period of:

Find null hypothesis if repair cost has a normal curve : The sample average is $97, and the SD is $17. Assume that the repair cost has a normal curve. What is the null hypothesis?

How did insistence of regulators of depository institute : How did the insistence of regulators of depository institutions to raise their capital ratios ultimately impact their degree of operating and financial leverage?

Determine the amount of the adjustment : If the estimate of loss from uncollectible accounts is based on sales, any existing balance in Allowance for Doubtful Accounts is added to the percentage of sales to determine the amount of the adjustment.

Determined to be other than temporary : The unrealized loss of $61,650 previously recognized as other comprehensive income and as a separate component of stockholders' equity is now determined to be other than temporary. That is, the company believes that impairment accounting is now a..

Is there evidence-dual degree students getting low grades : The population variances are 4.6 and 5.0 respectively. Using a level of significance of .05, is there evidence that the dual degree students are receiving lower grades?

Explain the cost of recharging a battery : The Cost of Recharging a Battery, A 12-V automotive storage battery is charged with a constant current of 2 amp for 24 hr.

Amount reported for operating expenses : During 2010, Burlington Company incurred operating expenses amounting to $600,000, of which $550,000 was paid in cash; the balance will be paid in January 2011. On the 2010 income statement of the company, what amount should be reported for operat..

Why does a company choose to do an ipo : Why does a company choose to do an IPO? What are some major concerns for the issuing company? Do you think choosing the right investment bank is a key to the success of the IPO?

User Account

All Pages