Presented below is selected information related to the financial instruments of Dawson Company at December 31, 2025.

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Presented below is selected information related to the financial instruments of Dawson Company at December 31, 2025. This is Dawson Company’s first year of operations.image



Instructions


a. Dawson elects to use the fair value option for these investments. Assuming that Dawson’s net income is $100,000 in 2025 before reporting any securities gains or losses, determine Dawson’s net income for 2025. Assume that the difference between the carrying value and fair value is due to credit deterioration.


b. Record the journal entry, if any, necessary at December 31, 2025, to record the fair value option for the bonds payable.

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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 9781119790976

18th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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