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P16-1A

PROBLEMS: SET A transactions ond sow financial statement presestation L02.3) Jourmalize debi investment P16-1A Vilander Carecenters Inc, provides financing and capital to the P16-1A Vilander Carecenters Inc. provides financing and capital to the healthcare or the elderly. h hose fiscal year ends on try. with a particular focus on nursing homes for the elderly. The following se actions relate to bonds acquired as an investment by Vilander, whose fiscal tan December 31. 2017 Jan. 1 Purchased at face value $2,000,000 of Javier Nursing Centers, Inc., Inc., 10-year, 8% bonds dated January 1, 2017, directly from Javier Accrual of interest at year end on the Javier bonds. Dec. 31 (Assume that all intervening transactions and adjustments have been properle re and that the number of bonds owned has not changed from December 31, 2017,e recorded December 31, 2019.) 2020 Jan 1 Received the annual interest on the Javier bonds. Jan. 1 Sold $1,000,000 Javier bonds at 106. Dec. 31 Accrual of interest at yearend on the Javier bonds. aj Gain on sele of deb investme: $60,000 Instructions (a) Journalize the listed transactions for the years 2017 and 2020. (b) Assume that the fair value of the bonds at December 31, 2017, was $2,200,000 Thse bonds are classified as available-for sale securities. Prepare the adjusting entry to record these bonds at fair value (c) Based on your analysis in part (b), show the balance sheet presentation of the bonds and interest receivable at December 31, 2017. Assume the investments are considere long-term. Indicate where any unrealized gain or loss is reported in the financia statements 218

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