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185- State Street Corporation-Marketable Securities State Street Corporation, tracing its begionings to the founding of the Unlon Bank in I792, is a major financla holding company with headquarters in Boston. Sate Street operatea primarily akrough principal banking wbsidiary, Stase Street Bank and That, with a focus on serving iuitarional inwarors Saate Street operates two lives of business, Investment Servicing and Invetment Management, to rapport iunitational investors worldwlde. Product isclude broberage and otker trading services, ecwrities finance, deposir and short-term inveatment faciliies risk and investonent reearch and invemen! 012 Form Learning Objectives Distinguish among securities classified as trading, available-for-sale, and held-4o-maturity Interpeet footmote disclosures of investment securities and analyze investment security accounts. Prepare joumal entries for securities purchases, sales, and year-end market-value adjustments Understand and critique the accounting treatment for marketable securitics. Refer to the 2012 financial statements and notes for State Street Corporation a Consider trading securities. Note that financial institutions such as State Street typically call these securities "Trading account assets. i. In general, what are trading securities? How would a company record S1 of dividends or interest received from trading securitsies? ili. If the market value of trading securities increased by S1 during the reporting period, what journal entry would the company record? b.Consider securities available-for-sale. Note that State Street calls these, "Investment securities available for sale. i. In general, what are securities available-for-sale? ii How would a company reoord $1 of dividends or interest received from securities available-for- sale? ii. If the market value of securities available-for-sale increased by $1 during the reporting period, what journal entry would the company record? maturity." i In geoteral, what are these securities? Why are equity securities never classified as held-to- ii. If the c Consider securities held-to-maturity, Note that State Street calls these, "lavestment securities held to maturity? market value of securities held-to-maturity increased by S1 during the reporting period what joumal entry would the company record? d. Consider the "Trading accoust assets" on State Street's balance sheet i. What is the balance in this account on December 31, 2012? What is the market value of these securities on that date? State Stroet Corporation-Markotablo Securities

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