Eastwood Enterprises owns 400 bonds of the Van Cleef Company (5% of the outstanding debt of...
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Eastwood Enterprises owns 400 bonds of the Van Cleef Company (5% of the outstanding debt of Van Cleef). Eastwood is trying to determine the fair value of Van Cleef's bonds. The relevant facts are as follows · Eastwood bought the Van Cleef bonds earlier in the accounting period for $1,000/bond at a time when the bonds were publicly papen • Since Eastwood bought the bonds, Van Cleef Company has been delisted from the stock exchange and there is no longer an active market in the Van Cleef bonds • Eastwood's internal valuation specialist estimates the Van Cleef bonds to be worth $900/bond. Eastwood plans to continue holding the bonds, but may someday sell them if their value increases sufficiently Required: 1. What is the fair value of Eastwood's investment in Van Cleef bonds? 2. Prepare a journal entry to record any necessary fair value adjustment. Complete this question by entering your answers in the tabs below. Flequired 1 Required 2 What is the fair value of Eastwood's investment in Van Cleef bonds? Far value ent. (If no entry is required for a transaction/e eld.) View transaction list Journal entry worksheet Record any necessary fair value adjustments. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry Eastwood Enterprises owns 400 bonds of the Van Cleef Company (5% of the outstanding debt of Van Cleef). Eastwood is trying to determine the fair value of Van Cleef's bonds. The relevant facts are as follows · Eastwood bought the Van Cleef bonds earlier in the accounting period for $1,000/bond at a time when the bonds were publicly papen • Since Eastwood bought the bonds, Van Cleef Company has been delisted from the stock exchange and there is no longer an active market in the Van Cleef bonds • Eastwood's internal valuation specialist estimates the Van Cleef bonds to be worth $900/bond. Eastwood plans to continue holding the bonds, but may someday sell them if their value increases sufficiently Required: 1. What is the fair value of Eastwood's investment in Van Cleef bonds? 2. Prepare a journal entry to record any necessary fair value adjustment. Complete this question by entering your answers in the tabs below. Flequired 1 Required 2 What is the fair value of Eastwood's investment in Van Cleef bonds? Far value ent. (If no entry is required for a transaction/e eld.) View transaction list Journal entry worksheet Record any necessary fair value adjustments. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry
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Related Book For
Accounting Principles
ISBN: 978-0470534793
10th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
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