Maddow and Wells, Inc. purchased equity securities in 2018. The management of the company has decided...

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Accounting

Maddow and Wells, Inc. purchased equity securities in 2018. Themanagement of the company has decided that the securities will notbe sold immediately, but will be held for at least three years.This will allow MW to maximize the potential gains from holding thesecurities. The new accountant at the company wants to classify thesecurities as held-to-maturity because they will be held for threeyears; the company has never held securities for this long before.How would you advise the management of the company to classify thesecurities? At the end of each reporting year, how will thesecurities be recognized on the company’s books? Support yourresponse with an appropriate ASC reference (ASC xxx-xx-xx-x) or ASU(accounting standard update).

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The term Securities refers to all kinds of negotiable financial instruments which is issued by the corporations has some monetary value and can be traded in the market Examples are shares bonds etc Majorly securities are classified into two categories Equities and Debt Equity involves buying and selling of the stock or shares and gives ownership rights in the company to the shareholder Debt represents the funds raised by a company by issuing bonds Debt securities is a type of loan funds which needs to be repaid by the See Answer

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