Elaina Company has the following investment as of December 31, 2022: Investment in debt securities of FourSquare
Question:
Elaina Company has the following investment as of December 31, 2022:
Investment in debt securities of FourSquare Company ...... $3,300,000
The carrying value and the fair value of the investment are the same at December 31, 2022. Elaina’s debt investment is considered held for collection. At December 31, 2023, the debt investment securities of Four Square are valued at $2,500,000. Assume that these investments are considered impaired.
Instructions
a. Prepare the journal entries to record the impairment of these securities at December 31, 2023.
b. Assuming the fair value of its debt investment is $2,950,000, what entries, if any, should be recorded in 2024 related to impairment?
c. Prepare the journal entries at December 31, 2024, assuming these securities are not impaired. Ignore interest revenue entries.
d. Assume that the debt investment in FourSquare Company was held-for-collection and selling and the expected credit loss was $250,000. Prepare the journal entry to record this impairment on December 31, 2023.
Step by Step Answer:
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield