Question
In: Accounting
Proper accounting for investments and the related Adjusting Journal Entries will have what net effect on 2026 Comprehensive Income?
Novi purchased ABC bonds on 1/1/23. Data regarding these available-for-sale securities follow:
Cost | MV | |
December 31, 2023 | $150,000 | $130,000 |
December 31, 2024 | 150,000 | 161,000 |
December 31, 2025 | 150,000 | 155,000 |
On 1/1/26, Novi sold $40,000 (cost) of the securities for $39,900. Market Value of the remaining securities at 12/31/26 was $112,000.
Proper accounting for investments and the related Adjusting Journal Entries will have what net effect on 2026 Comprehensive Income?
Select one:
a. $2,000
b. $7,100
c. $3,000
d. $3,100
e. $2,900
Solutions
Expert Solution
| Market Value of securities Dec 31, 2015 | 155,000 |
| Less: Sale value of securities | (39,900) |
| Less: Market value of remaining securities Dec 31, 2026 | (112,000) |
| Net effect on OCI | 3,100 |
Option (d) $3,100
ekkarill92 answered 2 years agoRelated Solutions
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