Hillsborough Co. has a held-for-collection investment in the bonds of Schuyler Corp. with a carrying (and fair) value of $70,000. Hillsborough determined that due to poor economic prospects for Schuyler, Hillsborough will not be able to collect all contractual cash flows and the bonds have decreased in value to $60,000. It is determined that this is a permanent loss in value. Prepare the journal entry, if any, to record the reduction in value.
Answer to relevant QuestionsCameron Company has a portfolio of debt investments that it has managed as a trading investment. At December 31, 2010, Cameron had the following balances related to this portfolio: debt investments, £250,000; securities ...Player Corporation makes an equity investment costing $73,000 and classifies it as non-trading. At December 31, the fair value of the investment is $67,000.InstructionsPrepare the adjusting entry to report the investments ...Choi Golf Co. uses titanium in the production of its specialty drivers. Choi anticipates that it will need to purchase 200 ounces of titanium in October 2010, for clubs that will be shipped in the holiday shopping season. ...Johnstone Co. purchased a put option on Ewing ordinary shares on July 7, 2010, for $240. The put option is for 200 shares, and the strike price is $70. (The market price of an ordinary share of Ewing on that date is $70.) ...Addison Manufacturing holds a large portfolio of debt and equity investments. The fair value of the portfolio is greater than its original cost, even though some investments have decreased in value. Sam Beresford, the ...
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