15-2

2019
Jan.1 Trading Securities 1,450,000
Cash 1,450,00

Dec.31 Unrealized Loss - TS 200,000

Trading Securities 200,000

2020
Oct.1 Cash 375,000
Trading Securities 325,000
Gain on sale of TS 50,000

Sale Price 375,000

Carrying Amount Sold 325,000
Gains on Sale 50,000

Dec.31 Unrealized Loss - TS 125,000

Trading Securities 125,000

Aura 325,000
Bora 200,000
Cara 400,000
Total Carrying Amount - Dec 31, 2019 925,000
Fair Value - Dec. 31, 2020 800,000
Decrease in Fair Value 125,000

15-4
Dec. 31, 2019
Unrealized Loss - other comprehensive income 150,000
Financial Asset - FVOCI 150,000

Dec. 31, 2020

Financial Asset - FVOCI 50,000
Unrealized Loss - other comprehensive income 50,000

15-9
Answer: B. 1,800,000
15-13
Sale Price 1,450,000
Less: Carrying Amount of B 1,550,000
Loss on sale debited to retained earnings Answer: B. (100,000)

Cash 1,450,000
Retained earnings 100,000
Financial Asset - FVOCI 1,550,000

Retained Earnings 150,000

Unrealized loss - other comprehensive income 150,000

20-9
Present Value of Principal 1,885,000
Present Value of Semiannual interest 2,492,400

Date Interest received Interest income Amortization Carrying Amount

January 1 4,377,400
June 30 200,000 218,870 18,870 4,396,270
December 31 200,000 219,814 19,814 4,416,084

Jan. 1 Investment in bonds 4,377,400

Cash 4,377,400

June 30 Cash 200,000

Interest income 200,000
30 Investment in bonds 18,870
Interest Income 18,870
Dec. 30 Cash 200,000
Interest income 200,000
30 Investment in bonds 19,814
Interest Income 19,814
20-20
Investment Balance, Jan 1, 2019 4,562,000

Amortization of Discount for 2019:

Interest Income 456,200
Interest Received 400,000 56,2000
Investment Balance, December 31,2019 4,618,200

Amortization of discount for 2020:

Interest Income 461,820
Interest Received 400,000 61,820
Interest Balance, December 31, 2020 Answer: A. 4,680.020

20-22
Date Interest received Interest income Amortization Carrying Amount
01/01/2019 4,206,000
12/31/2019 400,000 336,480 63,520 4,142,480
12/31/2020 400,000 331,398 68,5602 4,073,878
12/31/2021 400,000 326,122 73,878 4,000,000

Question 1
Market Value 3,800,000
Caryying Amount 4,142,480
Unrealized Loss Answer: A. (342,480)

Question 2
Market Value 3,600,000
Carrying Value 3,731,398
Increase in Unrealized Loss Answer: B. (131,398)

Question 3 Answer: C. 473,000

Question 4 Answer: B. 3,600,000

20-23
Question 1
Purchase Price 5,500,000
Transition Cost (100,000)
Adjusted Cost 5,400,000

Market Value 5,750,000

Adjusted Cost 5,400,000
Gain from Change in Fair Value Answer: C. 350,000

Question 2
Interest Income Answer: A. 600,000

Question 3
Carrying amount Answer: A. 5,750,000

Question 4
Gain from Change in Fair Value 350,000
Interest Income 600,000
Total Income from Investment Answer: B. 950,000