Reference no: EM133155586
Question - Part I - On January 1st of Year 1, Schmit Company purchased $2,000,000 of 5% bonds, paying par value. The company classified the debt investment as Available for Sale (AFS). The following information relates to the debt investment:
Year 1: Fair value on December 31st is $2,000,000
Year 2: Fair value on December 31st is $2,300,000
Year 3: Fair value on December 31st is $2,100,000
Year 4: The entire investment is sold for $1,900,000
Required -
1. Prepare the journal entry to record the acquisition of the investment in Year 1.
2. Prepare the journal entries to record the fair value adjustment at the end of Year 2 and Year 3.
3. Prepare the journal entries necessary to record the sale of the investment in Year 4 assuming that this security is the only debt investment held by the company.
4. Repeat Parts (a) through (c) assuming that the investment is classified as trading.
Part II - On January 1st of Year 1, Schmitt Company purchased $2,000000 of 5% bonds, paying par value. The company classified the debt investment as Available for Sale (AFS). On December 31st of Year 1, it was determined that the investment was impaired. The company intends to hold the investment and not to sell it prior to recovering the loss. The fair value of the investment is $1,650,000. The company computed the present value of the estimated cash flows expected to be collected over the lifetime of the investment. The present value is $1,875,000.
Required - Prepare all journal entries necessary to record the impairment.
|
Case study-climate friendly
: This case examines Greenpeace's attempts to develop a solutions-oriented approach to introducing more sustainable technologies in the refrigerants industry. The
|
|
Discuss the importance of having a system
: Discuss the importance of having a system, processes and policies in place to deliver advanced data analytics to managers.
|
|
Explain the relevance of convenience yield
: 1. Explain the relevance of Convenience yield and cost of carry in a business. Provide reference.
|
|
Implementing a new ehr system in a healthcare environment
: Outline the steps using AGILE development when implementing a new EHR system in a healthcare environment. Please use components of agile methodology such as scr
|
|
Prepare journal entry to record acquisition of investment
: On January 1st of Year 1, Schmit Company purchased $2,000,000 of 5% bonds, paying par value. Prepare journal entry to record acquisition of investment
|
|
Establishing priorities for qpi within the organization
: Leadership is essential to quality, patient safety, risk management, and performance improvement. Organizational leadership focuses on many things including set
|
|
Nonmonetary personal value of diversification
: Consider a case in which you, personally, are assessing your individual activities like a corporation would-that is to say, you have both the necessity and abil
|
|
What are the origins of the daubert standard
: What are the origins of the Daubert standard? Summarize the case and the origins of the Daubert standard in 300 words.
|
|
Prepare a depreciation schedule
: Prepare a depreciation schedule if the firm follows a policy of charging full depreciation at the year of purchasing the asset and no depreciation at the year
|