Exercise E 12-26 Fair Value Option Colah Company purchased $2.7 million of Jacks

Question

Exercise E 12-26 Fair Value Option

Colah Company purchased $2.7 million of Jackson. INC. 5% bonds at par on July 1, 2018, with interest paid semi-annually. when the bonds were aquired Colah decided to elect fair value option for accounting for its investment. At December 31, 2018, the jackson bond as a fair value of $3, 070,000. Colah sold the Jackson bonds on July 1, 2019 for $2,430,000.

Required:

1. Prepare Colah's journal entries to record:

a. The purchase of Jackson bonds on July 1

b. Interest revenue for the last half of 2018

c. Any year-end 2018 adjusting entries

d. Interest revenue for the first half of 2019

e. Record the entry to adjust to fair vale at the date of the sale

f. any entry or entries necessary upon the sale of the Jackson bonds on July 1, 2019

2. Fill out the following table to show the effect of the Jackson bonds on Colah's net income, other comprehensive income, and comprehensive income for 2018, 2019, and cumulatively over 2018 and 2019

2018 2019 Total

Net Income

OCI

Compehensive Income

Explanation / Answer

As per policy only first four questions will be answered

Part 1A

Part 1B

Part 1C

Part 1D

Date account titles and explanation debit credit July 1 2018 Trading securities investment 2700000 Cash 2700000

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.