Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. led corporation owns $1,000,000 of branch pharmace

LED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securities available-for-sale....

60.1K

Verified Solution

Question

Accounting

LED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securities available-for-sale. The market price of Branchs bonds fell by $450,000, due to concerns about one of the companys principal drugs. The concerns were justified when the FDA banned the drug. $100,000 of that decline in value already had been included in OCI as a temporary unrealized loss in a prior period. LED views $200,000 of the $450,000 loss as related to credit losses, and the other $250,000 as noncredit losses. LED does not plan to sell the investment and does not think it is more likely than not that it will have to sell the investment before fair value recovers. What journal entries should LED record to account for the decline in market value in the current period? How should the decline affect net income and comprehensive income?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

General Management
1.2K views

Amazon continues to make a name for itself as a major retailer. In four hundred words...

General Management
1.2K views

Watch 3 commercials. Identify the organizational pattern, reasoning and appeals used. P/s: Any commercials

Biology
1.2K views

1 What is the difference between electrical and chemical signals 2 What is the target...

Physics
1.2K views

31 Two point charges q and 2q are placed at the vertices B and C...

Physics
1.2K views

4 When two resistances X and Y are put in the left hand and right...

Geometry
1.2K views

Find the surface area of the cylinder in terms of T 14 cm Not drawn...

Calculus
1.2K views

Let h(x) = e-4Determine the equation of the tangent line to h at x =...

Calculus
1.2K views

The velocity function in meters per second is given for a particle moving along a...

Algebra
1.2K views

Classify the quadratic form below. Then make a change of variable, x = Py, that...

Accounting
1.2K views

You deposit $10,000 into an account earning an annual interest rate of 7% compounded each...

Accounting
1.2K views

Required information Skip to question [The following information applies to the questions displayed...

Accounting
1.2K views

Check my work 6 B28 Co. is considering the purchase of equipment that would allow...