Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. presented below is selected information related to

Presented below is selected information related to the financial instruments of Nash Company at December...

80.2K

Verified Solution

Question

Accounting

Presented below is selected information related to the financial instruments of Nash Company at December 31, 2020. This is Nash Companys first year of operations.

Carrying Amount

Fair Value (at December 31)
Investment in debt securities (intent is to hold to maturity) $38,600 $39,600
Investment in Chen Company stock 867,900 988,200
Bonds payable 215,000 191,500

(a) Nash elects to use the fair value option for these investments. Assuming that Nashs net income is $102,500 in 2020 before reporting any securities gains or losses, determine Nashs net income for 2020. Assume that the difference between the carrying value and fair value is due to credit deterioration.

Nashs net income for 2020 $

(b) Record the journal entry, if any, necessary at December 31, 2020, to record the fair value option for the bonds payable. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date

Account Titles and Explanation

Debit

Credit
Dec. 31, 2020

What is the account for B part not Profit/Loss A/c for credit side

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