Personal Finance Chapter 17 Essay
Chapter 17 Homework
CA 17-1)
Situation 1-
Since the Fair value is lower than the cost your T-account is as follows.
Unrealized holding G&L – Income $4200
So the journal entry would look like
Unrealized holding G&L –income statement $4200 Fair Value adjustment (trading) $4200
Situation 2-
When this change is made for the measurement basis: Security transferred at fair value at the date of transfer, which is the new cost basis of the security. The impact it has on stockholders equity is the unrealized gain or loss at the date of transfer increases or decreases stockholders equity. The impact it has on net income is the unrealized gain or loss at the date of transfer is recognized in
CA 17-1)
Situation 1-
Since the Fair value is lower than the cost your T-account is as follows.
Unrealized holding G&L – Income $4200
So the journal entry would look like
Unrealized holding G&L –income statement $4200 Fair Value adjustment (trading) $4200
Situation 2-
When this change is made for the measurement basis: Security transferred at fair value at the date of transfer, which is the new cost basis of the security. The impact it has on stockholders equity is the unrealized gain or loss at the date of transfer increases or decreases stockholders equity. The impact it has on net income is the unrealized gain or loss at the date of transfer is recognized in