Identifying assertions and supporting evidence You are engaged to examine the financial statements of Lauzon Inc. for the year ended December 31.

On October 1, Lauzon Inc. borrowed $250,000 from a local bank to finance a plant expansion. The loan agreement provided for the annual payment of principal and interest over three years. Lauzons existing plant was pledged as security for the loan.

Unfortunately, Lauzon ran into some difficulties in acquiring the new plant site. Thus, the plant expansion was delayed. Lauzon then proceeded to plan B, which was to invest the borrowed funds in stocks and bonds. As a result, on October 20, the entire amount borrowed was invested in securities.

Required Identify the assertions applicable to the above, and describe the relevant evidence that needs to be obtained to support them for the audit of investments in securities at December 31.