Question: Company maintained a large investment in debt securities valued at approximately $ 42 billion as of the beginning of the year. During the year, the

Company maintained a large investment in debt securities valued at approximately $ 42 billion as of the beginning of the year. During the year, the debt securities produced investment income (interest income) totaling $2.5 billion. At the year-end, the portfolio of debt securities had appreciated to $45.5 billion.

Please prepare the journal entries to record the year-end adjusting entries assuming that the debt portfolio is Classified as trading securities and Classified as available-for-sale securities and prepare the journal entry to record the interest earned (assume all interest is collected)

Step by Step Solution

★★★★★

3.42 Rating (152 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Question Answer to 1 Note 1 When the financial asset are classified as Trading Security or Available ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

The accounting records of BEST Metal Factory, include the following information for the year ended 31 December 2021: (a) Items (b) Materials inventory Work in process inventory Finished goods...

Assume that IQ scores follow a normal distribution with a mean of 100 and a standard deviation of 16. Use the empirical rule for normal distributions to answer the following questions. a. What...

Assume that IQ scores follow a normal distribution with a mean of 100 and a standard deviation of 16. a. What is the probability that an individual scores between 84 and 116? b. What is the...

Can you please answer the following question quickly? Software, Inc. maintained a large investment in marketable securities valued at approximately $42 billion as of the beginning of the year. During...

Software, Inc. maintained a large investment in marketable securities valued at approximately $42 billion as of the beginning of the year. During the year, the securities produced investment income...

a. Prepare the journal entries to record the year-end adjusting entries assuming that the debt portfolio is: Classified as trading securities Classified as available-for-sale securities b. Prepare...

URGENT!!! HELP NEEDED Git-X, Inc. maintained a large investment in debt securities (e.g., Bonds) valued at approximately $42 billion as of the beginning of the year. During the year, the debt...

Git-X, Inc. maintained a large investment in debt securities (e.g., Bonds) valued at approximately $42 billion as of the beginning of the year. During the year, the debt securities produced...

A processor asks for the contents of the virtual memory address 0x30020. The Paging scheme in use breaks this into a VPN of 0x30 and an offset of 0x020. PTB a CPU register that holds the address of...

According to Earthjustice, a non-profit environmental law firm, the BP disaster happened because managers werent managing, oil companies and regulators were colluding, and high risk was acceptable...

McWherter Instruments sold \ ( \ $ 5 0 0 \ ) million of \ ( 8 \ % \ ) bonds, dated January 1 , on January 1 , 2 0 2 4 . - The bonds mature on December 3 1 , 2 0 4 3 ( 2 0 years ) . - For bonds of...

The Cecil-Booker Vending Company changed its method of valuing inventory from the average cost method to the FIFO cost method at the beginning of 2009. At December 31, 2008, inventories were $120,000...

The Cecil-Booker Vending Company changed its method of valuing inventory from the average cost method to the FIFO cost method at the beginning of 2013. At December 31, 2012, inventories were $115,000...

Tim, a single taxpayer, operates a business a single member LLC. IN 2018, his LLC reports business income of $225,000 and business deductions of $575,000, resulting in a loss of $350,000. What are...

An aging analysis on June 30 of the accounts receivable of U-Z Door Corporation indicates that Uncollectible accounts amount to $86,000. Prepare the journal entry to record uncollectible accounts...

Which of the following is the correct order for preparing the financial statements listed? A) Balance sheet, statements of stockholders equity, and income statement. B) Income statement, statement of...

The area is completely enclosed by f(x) = x and g(x) = square root of x with an index of 4. Find or approximate to two decimal points the described area.

Holmes Corporation is a leading designer and manufacturer of material handling and processing equipment for heavy industry in the United States and abroad. Its sales have more than doubled, and its...

Thursday, October 24, 1929, easily ranks as the most dramatic day that Wall Street has ever seen.1 That day witnessed the beginning of the Great Stock Market Crash that over the following few years...

The Policy Committee of your company decides to change investment strategies. This change entails an increase in exposure to the stocks of large companies producing consumer products dominated by...

Emily Jackson (Social Security number 765-12-4326) and James Stewart (Social Security number 466-74-9932) are partners in a partnership that owns and operates a barber shop. The partnership's first...

1. Explain Merrill Lynchs fair value and fair value option notes (Exhibits 4 and 11). 2. Why did Merrill Lynch elect the fair value option for only some of its available-for-sale securities ($ 8.723...

Classifying securities. Firms must classify minority, passive investments in securities along two dimensions: - Purpose of investment: debt securities held to maturity, trading securities, or...