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SSSSS [86.1K]
3 years ago
15

Blight Financial has an investment in bonds issued by Searing Industries that are classified as trading securities. At December

31, Year 2, the Investment in Searing bonds account had a debit balance of $500,000, and the bonds were purchased at par so the $500,000 equals amortized cost. The Fair Value Adjustment account had a debit balance of $20,000. On December 31, Year 3, the amortized cost of those bonds has not changed, but the fair value of those bonds was $515,000. Which of the following will be included in the related journal entry dated December 31, Year 3?
a. Debit to Fair value adjustment for $5,000
b. Credit to Fair value adjustment for $5,000
c. Debit to Fair value adjustment for $25,000
d. Credit to Fair value adjustment for $25,000
Business
1 answer:
Paul [167]3 years ago
7 0

Answer:

b. Credit to Fair value adjustment for $5,000

Explanation:

Particulars                                Amount

Beginning balance of fair value adjustment   $20,000

Less: Unrealized gain on Dec 31, year 3         <u>$15,000</u>  ($515,000-$500,000)

Credit to Fair value adjustment                      <u>$5,000</u>

So, Credit to Fair value adjustment for $5,000 will be included in the related journal entry dated December 31, Year 3.

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In this case, Bob must use a means of communication that ensures that he will not interrupt his boss's meeting. In addition, it is practical because an immediate response can be given without having to pass authority filters.

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Suppose the U.S. yield curve is flat at 3% and the euro yield curve is flat at 5%. The current exchange rate is $1.4 per euro. W
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Answer: hello your question is incomplete attached below is the complete question.

answer :

3.02 million,    2.96 million,    2.91 million

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swap rate = forward exchange rate * exchange amount

For year 1

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1.4 * ( 1 + 0.03 / 1 + 0.05 )^2 * 2..2 million

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The economy begins in equilibrium at point E, representing the real interest rate r1 at which saving S1 equals desired investmen
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Answer:

The new equilibrium combination will be at increases I1 to I2, S1 to S2, and r1 to r2.

Explanation:

Saving or national saving of an economy is amount  of national income or gross domestic product (GPD) that is not spent by the government. Using a simple example of a closed economy, i.e. an economy with no foreign trade in terms and imports, this statement can be mathematically as follows:

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I = Y - C - G ......................................... (2)

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I = Y - C - G = S

I = S

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I1 = S1 ................................................................. (3)

Equation (3) is an equilibrium E which implies that Investment (I1) is equal to saving (S1) at the initial real interest rate (r1). Real interest here denotes the price for saving and investment.

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Therefore, the new equilibrium combination of real interest rate, saving, and investment if the government cuts spending, holding other factors constant, will be at increases in I1 to I2, S1 to S2, and r1 to r2.

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