Question: LED Corporation owns 100 000 shares of Branch Pharmaceuticals co
LED Corporation owns 100,000 shares of Branch Pharmaceuticals common stock and classifies its investment as securities available-for-sale. The market price of Branch's stock fell more than 30%, by $4.50 per share, due to concerns about one of the company's principal drugs. The concerns were justified when the FDA banned the drug. $1.00 per share of that decline in value already had been included in OCI as a temporary unrealized loss in a prior period. What journal entries should LED record to account for the decline in market value in the current period? How should the decline affect net income and comprehensive income?
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