Use the information in E16.21 and apply the Fair Value Option. Make the necessary entries for the
Question:
Use the information in E16.21 and apply the Fair Value Option. Make the necessary entries for the securities and show how they would be reported on the Equine Inc. financial statements.
Data from E16.21
Julia Barton is responsible for accounting for Equine Inc.’s short- and long-term investments. This is Equine’s first year in business and she reports to you that she has $102,000 of Trading Securities, $500,000 of Bonds that the company bought and intends to hold until they mature in eight years, and $1,200,000 in stocks and bonds that would be classified as Available-for Sale. Julia reports to you that the market values of these securities on December 31, 2019, are Available-for-Sale $1,350,000, Trading Securities $105,000, and Bonds $490,000. Using the Market Value Approach, make the necessary entries for these securities and show how they would be reported on the financial statements.
Step by Step Answer:
Introduction To AccountingAn Integrated Approach
ISBN: 9781119600107
8th Edition
Authors: Penne Ainsworth, Dan Deines