Reporting and Analyzing Investments

According to the textbook, which of the following is NOT listed as a primary reason for a corporation to invest in debt or equity securities?

How should debt investments be recorded at the time of acquisition?

Kuhl Corporation acquires 50 Doan Inc. 8 percent, 10-year, one thousand dollar bonds on January 1, 2019, for fifty thousand dollars. The bonds pay interest annually on January 1. If Kuhl's fiscal year ends on December 31, what is the correct adjusting entry to accrue interest?

On January 1, 2020, Kuhl Corporation sells its Doan Inc. bonds, which have a cost of fifty thousand dollars, for net proceeds of fifty three thousand dollars. What is the correct entry to record the sale?

What is the primary factor that determines the accounting method used for investments in common stock?

When an investor owns between 20 percent and 50 percent of the common stock of a corporation, what is the presumed level of influence and the required accounting method?

Under the cost method for stock investments (less than 20 percent ownership), when does the investor recognize revenue?

On July 1, 2019, Sanchez Corporation acquires 1,000 shares of Beal Corporation common stock for forty thousand dollars. On December 31, Sanchez receives a two dollar per share cash dividend. What is the correct journal entry to record the dividend?

Under the equity method of accounting for stock investments, how does an investor record its share of the investee's net income?

Milar Corporation owns 30 percent of Beck Company. In 2019, Beck reports net income of one hundred thousand dollars and pays a forty thousand dollar cash dividend. What is the net effect on Milar's Stock Investments account for 2019?

Which category of debt securities are bought and held primarily for sale in the near term to generate income on short-term price differences?

How are unrealized gains and losses on trading securities reported in the financial statements?

Pace Corporation's portfolio of trading securities has a total cost of one hundred forty thousand dollars and a total fair value of one hundred forty seven thousand dollars at year-end. What is the adjusting entry to record the securities at fair value?

How does the accounting for unrealized gains and losses on available-for-sale securities differ from that of trading securities?

Shelton Corporation has an available-for-sale securities portfolio with a total cost of two hundred ninety three thousand five hundred thirty seven dollars and a total fair value of two hundred eighty four thousand dollars. What is the correct adjusting entry?

What are the two criteria for an investment to be classified as a short-term investment?

How are short-term investments typically presented on a classified balance sheet?

In the income statement, where are gains and losses on the sale of investments, interest revenue, and dividend revenue typically reported?

When a company owns more than 50 percent of the common stock of another entity, what are the two companies called?

What type of financial statements are usually prepared when a company has a controlling interest (more than 50 percent ownership) in another company?

Which of the following is NOT a category for classifying debt investments for valuation and reporting purposes?

If Shelton Corporation has an equity security portfolio with a total cost of five hundred seventy seven thousand two hundred dollars and a fair value of five hundred seventy nine thousand dollars, what is the amount of the net unrealized gain?

The Fair Value Adjustment account is used to:

Where is the account 'Accumulated Other Comprehensive Income' presented in the financial statements?

Which of the following would NOT be considered a short-term investment?