Presented below is selected information related to the financial instruments of Dawson Company at December 31, 2010. This is Dawson Companys first year of operations.
Presented below is selected information related to the financial instruments of Dawson Company at December 31, 2010. This is Dawson Company’s first year of operations.
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Instructions
(a) Dawson elects to use the fair value option whenever possible. Assuming that Dawson’s net income is $100,000 in 2010 before reporting any financial instrument gains or losses, determine Dawson’s net income for 2010.
(b) Record the journal entry, if any, necessary at December 31, 2010, to record the fair value option for the bondspayable.
Carrying Amount Debt investments (intent is to hold for collection) 40,000 220,000 Fair Value (at December 31) $ 41,000 195,000 Bonds payable
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Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
IFRS edition volume 2
978-0470613474, 470613475, 978-0470616314
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