The following information shows Carperk Company's individual investments in securities during its current year, along with the
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Question:
The following information shows Carperk Company's individual investments in securities during its current year, along with the December fair values.
Investment in Brava Company bonds: $ cost; $ fair value. Carperk intends to hold these bonds until they mature in years.
Investment in Baybridge common stock: shares; $ cost; $ fair value. Carperk owns of Baybridge's voting stock and has a significant influence over Baybridge.
Investment in Duffa bonds: $ cost; $ fair value. This investment is not readily marketable and is not classified as heldtomaturity or trading.
Investment in Newton notes: $ cost; $ fair value. Newton notes are not readily marketable and are not classified as heldtomaturity or trading.
Investment in Farmers common stock: shares; $ cost; $ fair value. This stock is marketable, and Carperk intends to sell it within the year. This stock investment results in Carperk having an insignificant influence over Farmers.
Required
Identify whether each investment a through e should be classified as a shortterm or longterm investment. For each investment, indicate in which of the six investment classifications listed in Exhibit it should be placed.
Prepare a journal entry dated December to record the fair value adjustment for the portfolio of availableforsale debt securities Carperk had no availableforsale debt securities prior to this year.
Related Book For
Linear Algebra And Its Applications
ISBN: 9781292351216
6th Global Edition
Authors: David Lay, Steven Lay, Judi McDonald
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