User Account

All Pages

Prepare the journal entry to recognize the impairment

Assignment Help Accounting Basics
Reference no: EM131796319

Question - 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.

(b) What is the new cost basis of the municipal bonds?

Given that the maturity value of the bonds is $822,000, should Cairo Corporation amortize the difference between the carrying amount and the maturity value over the life of the bonds?

(c) At December 31, 2011, the fair value of the municipal bonds is $808,350. Prepare the entry to record this information.

Reference no: EM131796319

Questions Cloud

What do we learn from the standard deviation statistic : What do we learn from the standard deviation statistic and What is the difference between the SD and 95% CI - Discuss basic underlying descriptive statistics
What is the average of the numbers in the list : Suppose that 10% of the numbers in a list are 15.20% of the numbers are 25, and the remaining numbers are 50. What is the average of the numbers in the list?
What is the average of the third list : What is the average of the third list? Or is this not determined by the information given? Repeat a) with adding replaced by b) subtracting c) multiplying by.
What are the mean of the sampling distribution : What is the probability that the sample mean will be more than 2808 units away from the population mean?
Prepare the journal entry to recognize the impairment : Cairo Corporation has municipal bonds classified as available-for-sale at December 31, 2010. Prepare the journal entry to recognize the impairment
Calculate the firm wacc adjusted for taxes : Garden Tools Inc. has bonds, preferred stock, and common stocks outstanding. The number of securities outstanding, the current market price.
Suppose all the numbers in a list : Suppose all the numbers in a list of 100 numbers are non-negative, and the average of the list is 2, prove that at most 25 of the number in list are greater.
Lose playing chuck-a-luck : Over the long run, how many cents per game should a player expect to win or lose playing chuck-a-Luck?
Examine the psychological phases of disaster response : Examine the psychological phases of disaster response and how these are uniquely experienced by affected individuals and communities.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd