Question: Hanes Company sells debt investments costing $26,000 for $28,000, plus accured interest that has been recorded. In journalizing the sale, credits are to:
A
Debt Investment and Loss on Sales of Debet Investments.
B
Debt Investment, Gain on Sales of Debt Investment and Bond Inerest Receivable.
Question: Pryor Company receives net proceeds of $42,000 on the sale of stock investments that cost of $39,000. This transaction will result in reporting in the income statement a:
Question: The equity method of accounting for long-term investments in stock should be used when the investor has significant influence over an investee and owns:
A
between 20% and 50% of the investee's common stock.
Question: At the end of the first year of operations, the total cost of the trading securities portfolio is $120,000. Total fair value is $115,000. The financial statement should show :
A
a reduction of an asset of $5,000 and a realized loss of $5000.
B
a reduction of an asset of $5000 and an unrealized loss of $5000 in the stockholder equity section.
C
a reduction of an asset of $5000 in the current assets section and a unrealized loss of $5000 in "other expense and losses".
D
a reduction of an asset of $5000 in the current assets section and a realized loss of $5000 in "other expenses and losses".