Balance Sheet for Barbras Inc. : Assets: Cash $46,900 Debt investments (available-for-sale) $251,100 Total $298,000 Equity:...

Balance Sheet for Barbras Inc. :

Assets: Cash $46,900 Debt investments (available-for-sale) $251,100 Total $298,000

Equity: Common stock $274,600 Accumulated other comprehensive income $23,400 Total $298,000

The accumulated other comprehensive income related to unrealized holding gains on available-for-sale debt securities. The fair value of Barbras Inc.’s available-for-sale debt securities at December 31, 2020, was $201,000; its cost was $147,900. No securities were purchased during the year. Barbras Inc.’s income statement for 2020 was as follows. (Ignore income taxes.)

Income Statement:

Dividend revenue		$4,500
Gain on sale of investments		30,400
Net income		$34,900

1- Prepare the journal entry to record the sale of the available-for-sale debt securities (only 3 entries Cash, Gain on Sale of Investments, and Debt Investments)

2- Prepare the journal entry to record the Unrealized Holding Gain or Loss (only 2 entries)

3- Prepare a statement of comprehensive income (4 entries)

4- Prepare a balance sheet as of December 31 (3 entries under assets and 5 under stockholder's equity)

Expert Solution

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ekkarill92 answered 2 years ago

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