Manji Cullumber Corporation has municipal bonds classified as a held-to-maturity at December 31, 2025. These bonds have a par value of$824,000, an amortized cost of $824,000, and a fair value of $736,000. The company believes that impairment accounting is nowappropriate for these bonds.(a)Your answer is partially correct.Prepare the journal entry to recognize the impairment. (List debit entry before credit entry. Credit account titles are automaticallyindented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for theamounts.)Account Titles and ExplanationLoss on ImpairmentDebit88000CreditBonds PayableeTextbook and Media88000

This journal entry is crucial for maintaining the integrity and accuracy of your financial…

Answered: Cullumber Corporation has municipal…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ivanhoe Corporation has municipal bonds classified as a held-to-maturity at December 31, 2025. These bonds have a par value of $732,000, an amortized cost of $732,000, and a fair value of $648,000. The company believes that impairment accounting is now appropriate for these bonds. (a) Your answer is partially correct. Prepare the journal entry to recognize the impairment. (List debit entry before credit entry. 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 O for the amounts.) Account Titles and Explanation Loss on Impairment Debit 84000 Credit Debt Investments 84000
Tamarisk Corporation has municipal bonds classified as a held-to-maturity at December 31, 2025. These bonds have a par value of $791,000, an amortized cost of $791,000, and a fair value of $709,000. The company believes that impairment accounting is now appropriate for these bonds. (a) Prepare the journal entry to recognize the impairment. (List debit entry before credit entry. 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.) (b) Account Titles and Explanation eTextbook and Media List of Accounts Save for Later What is the new carrying value of the municipal bonds? New carrying value $ (c) Yes Given that the maturity value of the bonds is $791,000, should Tamarisk Corporation amortize the difference between the carrying amount and the maturity value over the life of the bonds? eTextbook and Media List of Accounts Save for Later Debit Account…
Nash Corporation has municipal bonds classified as a held-to-maturity at December 31, 2020. These bonds have a par value of $826,000, an amortized cost of $826,000, and a fair value of $754,000. The company believes that impairment accounting is now appropriate for these bonds. (a) Prepare the journal entry to recognize the impairment. (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.) Account Titles and Explanation Debit Credit enter an account title to record the impairment enter a debit amount enter a credit amount enter an account title to record the impairment enter a debit amount enter a credit amount (To record the impairment.)
Oriole Corporation has municipal bonds classified as a held-to-maturity at December 31, 2020. These bonds have a par value of $835,000, an amortized cost of $835,000, and a fair value of $754,000. The company believes that impairment accounting is now appropriate for these bonds. (a) Prepare the journal entry to recognize the impairment. (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.) Account Titles and Explanation Debit Credit enter an account title to record the impairment enter a debit amount enter a credit amount enter an account title to record the impairment enter a debit amount enter a credit amount (To record the impairment.)
Sunland Corporation has an investment in corporate bonds classified as available-for-sale at December 31, 2025. These bonds have a par value of $466,000, an amortized cost of $466,000, and a fair value of $388,000. The company believes that impairment accounting is now appropriate for these bonds because the expected credit loss on the bonds is $93,000. (a) Prepare the journal entry to recognize the impairment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
On January 1, 2025, Tamarisk Corporation redeemed $460,000 of bands at 98. At the time of redemption, the unamortized premium was $13,800. Prepare the corporation's journal entry to record the reacquisition of the bonds. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit
On January 1, 2020, Riverbed Corporation redeemed $400,000 of bonds at 96. At the time of redemption, the unamortized premium was $12,000. Prepare the corporation’s journal entry to record the reacquisition of the bonds. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.) Account Titles and Explanation Debit Creditenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amount
On January 1, 2025, Splish Corporation redeemed $520,000 of bonds at 99. At the time of redemption, the unamortized premium was $15,600. Prepare the corporation's journal entry to record the reacquisition of the bonds. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit
On January 1, 2020, Larkspur Corporation redeemed $620,000 of bonds at 97. At the time of redemption, the unamortized premium was $18,600. Prepare the corporation’s journal entry to record the reacquisition of the bonds. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.)
Hagar Corporation has municipal bonds classified as a held-to-maturity at December 31, 2020. These bonds have a par value of $800,000, an amortized cost of $800,000, and a fair value of $720,000. The company believes that impairment accounting is now appropriate for these bonds. Instructions a. Prepare the journal entry to recognize the impairment. b. What is the new cost basis of the municipal bonds? Given that the maturity value of the bonds is $800,000, should Hagar Corporation amortize the difference between the carrying amount and the maturity value over the life of the bonds? c. At December 31, 2021, the fair value of the municipal bonds is $760,000. Prepare the entry (if any) to record this information.
Sheridan Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2025. Amortized cost Fair value Expected credit loss (a) $50,800 41,600 12.450 Your answer is correct. What is the amount of the credit loss that Sheridan should report on this available-for-sale security at December 31, 2025? (Do not leave any answer field blank. Enter O for amounts.) Amount of the credit loss. $ 9200
Vaughn Corporation has municipal bonds classified as a held-to-maturity at December 31, 2020. These bonds have a par value of $766,000, an amortized cost of $766,000, and a fair value of $688,000. The company believes that impairment accounting is now appropriate for these bonds. Prepare the journal entry to recognize the impairment. What is the new cost basis of the municipal bonds? Given that the maturity value of the bonds is $766,000, should Vaughn Corporation amortize the difference between the carrying amount and the maturity value over the life of the bonds? At December 31, 2021, the fair value of the municipal bonds is $724,000. Prepare the entry (if any) to record this information.

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