At December 31, 2020, Wang Inc., a public company, holds the following investments on its balance sheet:
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Question:
At December 31, 2020, Wang Inc., a public company, holds the following investments on its balance sheet:
Investment: | Original Cost | Carrying Value | Fair Value |
Ahn Inc. (FVTOCI) | $167,000 | $175,000 | $150,000 |
Burnham Corp (FVTOCI) | $147,000 | $121,500 | $140,600 |
Wang Inc. entered into the following transactions during the year ended December 31, 2021:
- On January 2, 2021, purchased $260,000 of the 4% bonds of Miron Ltd. The bonds mature on December 31, 2026 and pay interest every June and December 31. The bond were purchased to yield 3%. The bonds were classified as FVTOCI.
- Sale of investment of Ahn Inc. for $153,300 on January 20, 2021.
At December 31, 2021, the investments had the following fair values:
- Burnham Corp: $161,800
- The Bond Miron was trading at 104
Required:
- Prepare all journal entries related to the above for the years ended December 31, 2020 and December 31, 2021.
- Assume that Wang Inc.’s net income for the year ended December 31, 2021 is $1,250,000. Prepare the bottom part of the statement of comprehensive income.
Related Book For
Accounting Principles
ISBN: 978-1119411482
13th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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