Preview of Chapter 17: ACCT2110 Intermediate Accounting II Weeks 8 & 9

PREVIEW OF CHAPTER 17
ACCT2110 Intermediate Accounting II Weeks 8 & 9
Copyright ©2020 John Wiley & Sons, Inc. 1

Debt Investments Learning Objective 1
Describe the accounting
Two Types of Financial Assets for debt investments.
•Debt investments.
•Equity investments.
Motivations for investing:
•Earn a high rate of return.
•To secure certain operating or financing
arrangements with another company (equity
securities).
LO 1 Copyright ©2020 John Wiley & Sons, Inc. 2

Debt Investments
Classification and Measurement of Financial Assets
Two criteria:
1.What is the company’s business model for
managing its financial assets?
2.What are the contractual cash flow
characteristics of the financial investment?

Classification and Measurement of Financial Assets
Summary of the classification and measurement
of debt and equity investments.
ILLUSTRATION 17.1

A Closer Look at Debt Investments
Debt investments are characterized by contractual
payments on specified dates of
•principal and
•interest on the principal amount outstanding.
Companies group debt investments into three
categories:
1.Held-for-collection
2.Held-for-collection and selling
3.Trading securities

A Closer Look at Debt Investments
Accounting for Debt Investments by Category
Companies group debt investments into three categories:
1.Held-for-collection
2.Held-for-collection and selling
LT
3.Trading securities holding
Frequent
trading
ILLUSTRATION 17.2
Debt Investments—Held-for-Collection
Debt Investment at Amortized Cost
Illustration: Robinson SA purchased €100,000 of 8 percent
bonds of Evermaster AG on January 1, 2022, at a discount,
paying €92,278. The bonds mature January 1, 2027 and
yield 10 percent; interest is payable each July 1 and
January 1. Robinson records the investment as follows:
January 1, 2022
Debt Investments 92,278

Cash 92,278
Schedule of Interest Revenue and Bond Discount Amortization—
Effective Interest Method
4% 5%
ILLUSTRATION 17.3

Journal Entry to Record Receipt of First Semiannual Interest
Payment
ILLUSTRATION 17.3
Robinson records the receipt of the first semiannual

interest payment on July 1, 2022, as follows:
July 1, 2022
Cash 4,000
Debt Investments 614
Interest Revenue 4,614
Journal Entry to Record Accrued Interest and Amortization of Discount
ILLUSTRATION 17.3
Robinson is on a calendar-year basis, it accrues interest and
amortizes the discount at December 31, 2022, as follows:
December 31, 2022
Interest Receivable 4,000
Reporting of Bond Investments at Amortized Cost
December 31, 2022
ILLUSTRATION 17.4

Amortization of Discount on November 1, 2024
Assume that Robinson sells its investment on November 1, 2024, at 99¾ plus accrued
interest. Robinson must record discount amortization from July 1, 2024, to November 1,
2024.
November 1, 2024
ILLUSTRATION 17.3
Interest Revenue 522
LO 1
(€783 × 4/6 = €522)Copyright ©2020 John Wiley & Sons, Inc. 12
Computation of Gain on Sale of Bonds 100,000 x 99¾
ILLUSTRATION 17.5
Robinson records the sale of the bonds as follows.
November 1, 2024
Cash (€99,750 + €2,667) 102,417

Interest Revenue (4/6 × €4,000) 2,667
Debt Investments (balance) 96,193
Gain on Sale of Investments 3,557
Debt Investments— Held-for-Collection and Selling
Debt investments held-for-collection and selling follow the
same accounting entries as debt investments held-for-
collection during the reporting period. That is, they are
recorded at amortized cost.
However, at each reporting date, companies
•Adjust the amortized cost to fair value.
•Any unrealized holding gain or loss is reported as part of
other comprehensive income rather than in the profit and
loss statement.

Debt Investments—Held-for-Collection and Selling
Single Security
Illustration: Graff plc purchases £100,000, 10 percent, five-year
bonds on January 1, 2022, with interest payable on July 1
and January 1. The bonds sell for £108,111, which results in a
bond premium of £8,111 and an effective-interest rate of 8
percent. Graff records the purchase of the bonds as follows.
January 1, 2022

Cash 108,111
Schedule of Interest and Bond Premium Amortization—Effective-Interest Method
ILLUSTRATION 17.6

Journal Entry to Record Interest Revenue and Bond Premium
Amortization on July 1, 2022
ILLUSTRATION 17.6
Illustration (Single Security): The entry to record interest revenue

on July 1, 2022, is as follows.
July 1, 2022
Cash 5,000
Interest Revenue (balance) 4,324
Journal Entry to Record Interest Revenue and Bond Premium
Amortization on Dec. 31, 2022
ILLUSTRATION 17.6
Illustration (Single Security): At December 31, 2022, Graff

makes the following entry to recognize interest revenue.
December 31, 2022

Interest Receivable 5,000
Journal Entry to Apply Fair Value
ILLUSTRATION 17.6
Illustration (Single Security): To apply the fair value method to these debt investments, assume
that at December 31, 2022 the fair value of the bonds is £105,000. Graff makes the following
entry.
105,000 - 106,732
December 31, 2022
Unrealized Holding Gain or Loss—Equity 1,732
Fair Value Adjustment 1,732
Computation of Fair Value Adjustment—HFCS (2022)
Illustration (Portfolio of Securities): Webb AG has two debt securities
classified as held-for-collection and selling. The following
illustration identifies the amortized cost, fair value, and the
amount of the unrealized gain or loss.
ILLUSTRATION 17.7

Journal Entry to Record Loss
ILLUSTRATION 17.7
Prepare the adjusting entry Webb would make on December
31, 2022 to record the loss.
December 31, 2022
Sale of HFCS Securities
If company sells bonds before maturity date:

•It must make entries to remove from the Debt
Investments account the amortized cost of bonds
sold.
•Any realized gain or loss on sale is reported in the
“Other income and expense” section of the income
statement.

Journal Entry to Record Sale of HFCS Securities
Illustration: Webb AG sold the Watson bonds (from Illustration
17.7) on July 1, 2023, for £90,000, at which time it had an
amortized cost of £94,214.
ILLUSTRATION 17.8
July 1, 2023
Cash 90,000
Loss on Sale of Investments 4,214
Computation of Fair Value Adjustment—HFCS (2023)
Illustration: Webb reports this realized loss in the “Other income
and expense” section of the income statement. Assuming no
other purchases and sales of bonds in 2023, Webb on December
31, 2023, prepares the information:
ILLUSTRATION 17.9
Adjusting Entry on December 31, 2023
Illustration: Webb records the following at December 31, 2023.
ILLUSTRATION 17.9
December 31, 2023

Reporting of HFCS Securities
ILLUSTRATION 17.10

Debt Investments— Trading
Co often hold debt investments with the intention of
selling them in a short period of time. These debt
investments are often referred to as trading investments.
Co report trading securities
•at fair value,
•with unrealized holding gains and losses reported as part
of net income.
A holding gain or loss is the net change in the fair value of
a security from 1 period to another, exclusive of dividend
or interest revenue recognized but not received.

Debt Investments—Trading
Computation of Fair Value Adjustment—Trading
Securities Portfolio (2022)
Assume that on December 31, 2022, Western Publishing
Illustration:
determined the distribution of its trading securities portfolio to be as in
Illustration 17.10. At the date of acquisition, Western Publishing recorded
these trading securities at cost, in the account entitled Debt Investments.
This is the first valuation of this recently purchased portfolio.
ILLUSTRATION 17.11

Debt Investments—Trading
Adjusting Entry on December 31, 2022
Illustration: At December 31, 2022, Western Publishing makes an
adjusting entry to the Fair Value Adjustment account, to record both
the increase in value and the unrealized holding gain.
ILLUSTRATION 17.11
December 31, 2022
Unrealized Holding Gain or Loss—Income 3,750
Fair Value Option
Companies have the option to report most financial
assets at fair value, with all gains and losses related to
changes in fair value reported in the income statement.
•Applied on an instrument-by-instrument basis.
•Generally available only at the time a company first
purchases the financial asset or incurs a financial
liability.
•Company must measure this instrument at fair value
until the company no longer has ownership.

Fair Value Option
Journal Entry on December 31, 2022
Illustration: Hardy AG purchases bonds issued by the
German Central Bank. Hardy plans to hold the debt
investment until it matures in five years. At December 31,
2022, the amortized cost of this investment is €100,000; its
fair value at December 31, 2022, is €113,000. If Hardy
chooses the fair value option to account for this investment,
it makes the following entry at December 31, 2022.
December 31, 2022

Debt Investments (German bonds) 13,000
Fair Value Option (continued)
In this situation,
• Hardy uses the Debt Investment account to record the
change in fair value at Dec 31.
• It does not use the Fair Value Adjustment account.
• The unrealized gain or loss is recorded as part of net income
even though it is managing the investment on a held-for-
collection basis.
• Hardy must continue to use the fair value method to record
this investment until it no longer has ownership of the
security.

Refer to course outline
Week 8 Exercises
E17-3, E17-4, E17-7, E17-5
Equity Investments Learning Objective 2
Describe the accounting
Equity investment represents
for equity investments.
•ownership interest, such as ordinary, preference, or
other capital shares.
•rights to acquire or dispose of ownership interests at an
agreed-upon or determinable price, such as in warrants
and rights.
Cost includes
•Purchase price of the security.
•Broker’s commissions and fees are recorded as expense.

Equity Investments
Levels of Influence Determine Accounting Methods
The degree to which one corporation (investor) acquires an
interest in the common stock of another corporation
(investee) generally determines the accounting treatment for
the investment subsequent to acquisition.
ILLUSTRATION 17.12

Equity Investments
Accounting $ Reporting for Equity Investments by Category
ILLUSTRATION 17.13
Equity Investments
Holdings of Less Than 20%
Under I F R S, the presumption is that equity investments are held-
for-trading.
General accounting and reporting rule:
•Investments valued at fair value.
•Record unrealized gains and losses in net income.
IFRS allows companies to classify some equity investments as non-
trading.
•General accounting and reporting rule:
•Investments valued at fair value.
•Record unrealized gains & losses in other comprehensive income.

Equity Investments—Trading (Income)
Illustration: On November 3, 2022, Republic SA purchased
ordinary shares of three companies, each investment
representing less than a 20 percent interest. These shares
are held-for-trading.

Equity Investments —Trading (Income)
Journal Entries for Acquisition and Receipt of Dividends
Republic records these investments on November 3, 2022 as follows:

November 3, 2022
Equity Investments 718,550
Cash 718,550
On December 6, 2022, Republic receives a cash dividend of €4,200 on its
investment in the ordinary shares of Nestlé.
December 6, 2022
Cash 4,200
Dividend Revenue 4,200
Computation of Fair Value Adjustment—Equity Investment Portfolio
(2022) At December 31, 2022, Republic’s equity investment
portfolio has the carrying value and fair value shown.
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& Sons, Inc. 40
Adjusting Journal Entry on December 31, 2022
ILLUSTRATION 17.14
On December 31, 2022, Republic prepares an adjusting entry to
record the decrease in fair value and to record the loss as follows.
December 31, 2022
Computation of Gain on Sale of Burberry Shares
On January 23, 2023, Republic sold all of its Burberry ordinary
shares, receiving €287,220.
ILLUSTRATION 17.15
January 23, 2023

Cash 287,220

Computation of Fair Value Adjustment—Equity Investment
Portfolio (2023)
In addition, assume that on February 10, 2023, Republic purchases €255,000 of Continental
Trucking ordinary shares (20,000 shares €12.75 per share), plus brokerage commissions of
€1,850. Republic’s equity investment portfolio as of December 31, 2023 is as follows.
ILLUSTRATION 17.16

Adjusting Journal Entry on December 31, 2023
ILLUSTRATION 17.16
Republic records this adjustment on Dec. 31, 2023, as follows.
December 31, 2023
Equity Investments—Non-Trading (OCI)
The accounting entries to record non-

trading equity investments are the same as
for trading equity investments, except for
recording the unrealized holding gain or
loss.
Companies report the unrealized holding
gain or loss as other comprehensive income.

Purchase of Equity Investments
Illustration: On December 10, 2022, Republic SA purchased 1,000 ordinary
shares of Hawthorne Company for €20.75 per share (total cost €20,750).
The investment represents less than a 20 percent interest. Hawthorne is
a distributor for Republic products in certain locales, the laws of which
require a minimum level of share ownership of a company in that
region. The investment in Hawthorne meets this regulatory
requirement. Republic accounts for this investment at fair value, with
unrealized gains and losses recorded on other comprehensive income.
December 10, 2022

Equity Investments (Hawthorne) 20,750
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20,750 46
Equity Investments—Non-Trading
Receipt of Cash Dividends
On December 27, 2022, Republic receives a cash dividend of €450
on its investment in the ordinary shares of Hawthorne Company.
It records the cash dividend as follows.
December 27, 2022

Cash 450
Dividend Revenue 450

At December 31,
Computation of2022,
Fair Republic’s investment in Hawthorne has
Value Adjustment
the carrying value and fair value shown.
ILLUSTRATION 17.17
Republic records this adjustment as follows.
December 31, 2022
Equity Investment (Hawthorne) 3,250
The Equity Investment account is used because the non-trading classification is
applied on investment by investment basis, rather than on a portfolio basis.

Financial Statement Presentation of Equity Investments at Fair Value
(2022)
ILLUSTRATION 17.18

Equity Investments—Non-Trading
Adjustment to Carrying Value of Investment
On December 20, 2023, Republic sold all of its Hawthorne
Company ordinary shares receiving net proceeds of €22,500.
ILLUSTRATION 17.19
Entry to adjust the carrying value of the non-trading investment.
December 20, 2023
Equity Investment (Hawthorne) 1,500
Journal Entry to
On December 20,Record
2023, Sale of Investment
Republic sold all of its Hawthorne
Company ordinary shares receiving net proceeds of €22,500.
ILLUSTRATION 17.19
Entry to record the sale of the investment.
December 20, 2023

Cash 22,500

Equity Investments Learning Objective 3
Holdings Between 20% and 50% Explain the equity
method of accounting.
An investment (direct or indirect) of 20 percent or more
of the voting shares of an investee should lead to a
presumption that in the absence of evidence to the
contrary, an investor has the ability to exercise
significant influence over an investee.
In instances of “significant influence,” the investor must
account for the investment using the equity method.

Holdings Between 20% and 50%
Equity Method
Record the investment at cost and subsequently adjust the
amount each period for changes in investee’s net assets.
•Investor’s proportionate share of the earnings (losses) of the
investee increases (decreases) the investment’s carrying amount.
•Dividends received from the investee decrease the investment’s
carrying amount.
If investor’s share of investee’s losses exceeds the carrying
amount of the investment, the investor ordinarily should
discontinue applying the equity method and not recognize
additional losses.

Comparison of Fair Value Method and Equity Method
ILLUSTRATION 17.20
No update of mkt price change

No update of mkt price change
Equity Investments
Holdings of More Than 50%
Controlling Interest - When one company acquires a voting
interest of more than 50 percent in another company.
•Investor is referred to as the parent.
•Investee is referred to as the subsidiary.
•Investment in the subsidiary is reported on the parent’s
books as a long-term investment.
•Parent generally prepares consolidated financial statements.

Learning Objective 4
Evaluate other major issues related
to debt and equity investments.
Other Reporting Issues-Impairment of Value 資產減值

A company should evaluate every debt investment
accounted for at amortized cost, at each reporting
date, to determine if it has suffered impairment—a
loss in value such that the fair value of the
investment is below its carrying value.

If the company determines that an investment is
impaired, it writes down the amortized cost basis of
the individual security to reflect this loss in value.
The company accounts for the write-down as a
realized loss, and it includes the amount in net
income.

Impairment of Value
Impairment—Investment Measured at Amortized Cost
Illustration: At December 31, 2021, Mayhew Ltd. has a
debt investment in Bao Group, purchased at par for
¥200,000 (amounts in thousands). The investment has
a term of four years, with annual interest payments at
10 percent, paid at the end of each year (the historical
effective-interest rate is 10 percent). This debt
investment is classified as held-for-collection.
Use the information on the next slide to record the
loss on impairment.

Investment Cash Flows and Computation of Impairment Loss
ILLUSTRATION 17.22
ILLUSTRATION 17.23
December 31, 2022

Loss on Impairment 12,680
Allowance for Impaired Debt Investments 12,680
Recovery of Impairment Loss 減值損失的追回
If subsequently the impairment loss decreases, some or all
of the previously recognized impairment loss shall be
reversed with a
•debit to the Allowance for Impaired Debt Investments
account and
•crediting Recovery of Impairment Loss.
Reversal of impairment losses shall not result in a carrying
amount of the investment that exceeds the amortized cost
that would have been reported had the impairment not
been recognized.

Recovery of Impairment Loss (continued)
For example, assume that on March 31, 2023, Mayhew
determines that Bao’s credit risk has declined significantly.
Mayhew therefore decides to reverse the impairment by making
the following entry.
March 31,
2023 12,680
Allowance for Impaired Debt
Investments
Recovery of Loss on Impairment 12,680

Impairment of Value
Impairment—Debt Investments Measured at Fair Value
(HFCS)
Companies that have debt investments that are
held-for-collection and selling (H FCS) report the
investment at fair value, and any changes in fair
value are reported in other comprehensive income.
For these investments, companies use a different
impairment model.

Impairment—Debt Investments Measured at Fair
Value (HFCS)
Illustration: Assume that Alexander AG purchases a HFCS
debt investment on July 1, 2022, for €1,000,000 (its
face value). The debt investment has an interest rate
of 7 percent and a maturity date of July 1, 2027. At
December 31, 2022, the fair value of the investment
has declined to €960,000, due to an increase in market
interest rates. The entries to record this debt
investment in 2022 are shown in Illustration 17.24.

Impairment—Debt Investments Measured at Fair Value (HFCS)
HFCS Impairment Entries
ILLUSTRATION 17.24
Impairment—Debt Investments Measured at Fair Value
(HFCS) Financial Statement Presentation
At December 31, 2022, Alexander AG’s financial
statements are as shown in below.
ILLUSTRATION 17.25

Impairment—Debt Investments (HFCS)
Additional Question
What happens if the €40,000 decline is caused by
1)a change of €10,000 due to market interest rate changes and
2)an impairment of €30,000 due to credit risk?
In this case, the third entry in Illustration 17.24 changes
because the impairment loss of €30,000 is reported in the
income statement, not in other comprehensive income. The
entries to record the impairment and the change in fair value
and related closing entry are shown in Illustration 17.26.

Impairment Entries—Increase in Credit Risk
What happens if the €40,000 decline is caused by
1)a change of €10,000 due to market interest rate changes &
2)an impairment of €30,000 due to credit risk?
ILLUSTRATION 17.26

Financial Statement Presentation
At Dec 31, 2022, Alexander’s financial statements are as shown.
ILLUSTRATION 17.27
Sale of Debt Investments
If we assume Alexander sells its debt investments on January
1, 2023, for €960,000 (its fair value at that time), the entries
are as follows.
January 1, 2023
Cash 960,000
Loss on Sale of Debt Investment 10,000
Allowance of Impaired Debt 30,000
Investments
Debt Investments 1,000,000
Fair Value Adjustments 10,000

LOAccumulated
4 Comprehensive Income
Copyright ©2020 John Wiley & Sons, Inc. 10,00070
Journal Entry to Record Decrease in Credit Risk
What happens if Alexander decides to keep its debt investment
and later determines that its credit risk on this investment has
decreased by €15,000? In this case, it makes the following
entry.
Allowance of Impaired Debt 15,000

Investments
Recovery of Impairment Loss 15,000

Impairment Model Summary
Asset Measurement Basis Impairment Model
Loans, receivables, and debt Expected credit losses recognized
securities measured at amortized in net income.
cost.
Debt securities measured at fair Expected credit losses recognized
value with gains and losses in income; remaining fair value
recorded in other comprehensive change recorded in other
income. comprehensive income.
Debt and equity securities Impairment measured as the
measured at fair value with gains difference between the lower-of-
and losses recorded in net amortized-cost-or-fair value (debt
income. securities) or lower-of-cost-or-fair
value (equity securities).
ILLUSTRATION 17.28
Recycling Adjustments
Reporting Issues—Single-Period Example
To provide a single-period example of the reporting of
investment securities and related gain or loss on held-for-
collection and selling (H F CS) investments, assume that on
January 1, 2022, Hinges plc had cash and share capital—
ordinary of £50,000. At that date, the company had no other
asset, liability, or equity balances. On January 2, Hinges
purchased for cash £50,000 of debt securities classified as H
FCS. On June 30, Hinges sold part of the HFCS security debt
portfolio, realizing a gain as shown in Illustration 17.29.

Computation of Unrealized and Realized Gains
On June 30, Hinges sold part of the HFCS security debt portfolio, realizing
a gain as shown.
ILLUSTRATION 17.29
• Hinges did not purchase or sell any other securities during 2022.
It received £3,000 in interest during the year. At December 31,
2022, the remaining portfolio is as shown.
ILLUSTRATION 17.30

Income Statement and Statement of Comprehensive
Income
ILLUSTRATION 17.31
ILLUSTRATION 17.32

Statement of Changes in Equity and Comparative Statement of Financial
Position
ILLUSTRATION 17.33

ILLUSTRATION 17.34
Recycling Adjustments
Reporting Issues—Multi-Period Example
When a co sells securities in the year, double-counting of the
realized gains or losses in comprehensive income can occur.
This double-counting results when a co reports unrealized
gains or losses in other comprehensive income in a prior
period and reports these gains or losses as part of net income
in the current period.
To ensure that gains and losses are not counted twice when a
sale occurs, a reclassification adjustment is necessary.

HFCS Investment Portfolio (2021)
To illustrate, assume that Open AG has the two HFCS debt investments
in its portfolio at the end of 2021 (its first year of operations).
ILLUSTRATION 17.35
Journal Entry to Record Unrealized Holding Gain
ILLUSTRATION 17.35
The entry to record the unrealized holding gain in 2021 is as follows.

December 31, 2021
Fair Value Adjustments 40,000

Statement of Comprehensive Income (2021)
If Open reports net income in 2021 of €350,000, it presents a
statement of comprehensive income as shown.
ILLUSTRATION 17.36

Entries on December 31, 2021 and August 10, 2022
The entry to transfer the unrealized holding gain—equity to
accumulated other comprehensive income is as follows.
December 31, 2021 (Closing Entry)
Accumulated Other Comprehensive Income 40,000
On August, 10, 2022, Open sells its Lehman Inc. bonds for €105,000
and realizes a gain on the sale.
August 10, 2022

Cash 105,000
HFCS Investment Portfolio (2022)
This illustration shows the computation of the change in the
Fair Value Adjustment account (based on only the Woods Co.
investment).
ILLUSTRATION 17.37
The entry to record the unrealized holding gain or loss in 2022 is:
December 31, 2022
Fair value Adjustment 5,000
Statement of Comprehensive Income (2022)
Assume that Open reports net income of €720,000 in 2022,
including the realized sale on the Lehman bonds, its
statement of comprehensive income is presented as shown.
ILLUSTRATION 17.38

December 31, 2022 Closing Entry
At December 31, 2022, Open reports on its statement of
financial position debt investments of €155,000 (cost €120,000
plus a fair value adjustment of €35,000) and accumulated other
comprehensive income in equity of €35,000 (€40,000 − €5,000).
The entry to transfer the Unrealized Holding Loss—Equity to
Accumulated Other Comprehensive Income is as follows.
December 31, 2022 (Closing Entry)
Accumulated Other Comprehensive Income 5,000


Note Disclosure of Reclassification Adjustments
This reclassification adjustment may be made in the income
statement, in accumulated other comprehensive income or in a
note to the financial statements. The IASB prefers to show the
reclassification amount in accumulated other comprehensive
income in the notes to the financial statements. For Open AG, this
presentation is as shown.
ILLUSTRATION 17.39

Transfers Between Categories
Transferring an investment from one classification
to another
•should occur only when the business model for
managing the investment changes.
•IASB expects such changes to be rare.
•Companies account for transfers between
classifications prospectively 前瞻性 , at the
beginning of the accounting period after the change
in the business model.

Transfers Between Categories Example
Illustration: British Sky Broadcasting Group plc (GBR) has a
portfolio of debt investments that are classified as trading; that
is, the debt investments are not held-for-collection but managed
to profit from interest rate changes. As a result, it accounts for
these investments at fair value. At December 31, 2021, British
Sky has the following balances related to these securities.

Transfers Between Categories
Journal Entry to Record Reclassification
Illustration: As part of its strategic planning process, completed
in the fourth quarter of 2021, British Sky management decides
to move from its prior strategy—which requires active
management—to a held-for-collection strategy for these debt
investments. British Sky makes the following entry to transfer
these securities to the held-for-collection classification.
January 1, 2022
Refer to course outline
Questions
Week 9 classwork
E17-8, E17-10, E17-11, maybe E17-9

Week 9 homework
^ P17-1, P17-11 (submitted in Week 11)
# P17-10 (presentation for each group 5 student

in Week 11)
End
End of
of Chapter
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PREVIEW OF CHAPTER 17

ACCT2110 Intermediate Accounting II Weeks 8 & 9

Copyright ©2020 John Wiley & Sons, Inc. 1

LO 1 Copyright ©2020 John Wiley & Sons, Inc. 2

LO 1 Copyright ©2020 John Wiley & Sons, Inc. 3

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Debt Investments 92,278

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Robinson records the receipt of the first semiannual

December 31, 2022

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Cash (€99,750 + €2,667) 102,417

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Debt Investments 108,111

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Illustration (Single Security): The entry to record interest revenue

Illustration (Single Security): At December 31, 2022, Graff

December 31, 2022

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If company sells bonds before maturity date:

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Fair Value Adjustment 4,537

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December 31, 2022

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Republic records these investments on November 3, 2022 as follows:

January 23, 2023

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The accounting entries to record non-

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December 10, 2022

December 27, 2022

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December 20, 2023

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No update of mkt price change

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Other Reporting Issues-Impairment of Value 資產減值

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December 31, 2022

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