Fair Value Measurement Presented below is information related to the purchases of common stock by Lilly Company

Question:

Fair Value Measurement Presented below is information related to the purchases of common stock by Lilly Company during 2010.

(a) What entry would Lilly make at December 31, 2010, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option?

(b) What entry would Lilly make at December 31, 2010, to record the investment in Lee Corporation, assuming that Lilly wants to classify this security as available-for-sale? This security is the only available-for-sale security that Lilly presently owns.

(c) What entry would Lilly make at December 31, 2010, to record the investment in Woods Inc., assuming that Lilly wants to classify this investment as a tradingsecurity?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...