ACTG Chapter 12 Review

What’s the abbreviation we’re gonna use for writing out debt investments?

ConCalComb Faceoff, Record

What is the process for the sale of an AFS Security?

Adjust, Reverse, Record.

Adjustments:
Cost<FV

GOI

Adjustments:
Cost>FV

LOI

When Dividends are declared, what entry do we use?

	Dr	Cr
Dividend Receivable	xx
Dividend Income		xx

Think of Sales Revenue going into AR with the declaration of dividends.

When Dividends are received, what entry do we use?

	Dr	Cr
Cash	xx
Dividend Revenue		xx

Method	Name	No. of Shares	Unit Cost	Total Cost	Fair Value
FVNI	Mining Inc	1000	42	42000	41000
FNI	Toys and Things	1500	15	22500	20000

How much unrealized holding loss goes into each company?

Total Costs-Fair Values
Mining Inc=42000-41000=1000
Toys and Things=22500-20000=2,500

Fair Value of Net Income

The equation to record carrying value is:

[purchase price +/- FVA balance]

Investment in Equity Securities
In a situation where you are given the equity security acquisition percentage and the amount of money it took to require said equity security, how would you find the fair value of the net assets?

Equity security acquisition%/Acquisition price=Fair value of net assets

If a problem is marked as available for sale, what do we label the unrealized holding gains/losses in the journal entries?

Unrealized holding gain/loss (OCI)

How do we record the initial purchase of an investment?

	Dr	Cr
Investment	xx
Cash		xx

How do we record the purchase of interest revenue?

	Dr	Cr
Cash	xx
Interest Revenue		xx

What Journal entry do we use to record a fair value adjustment increase?

	Dr	Cr
Fair Value Adjustment	xx
Unrealized Holding Gain		xx

What Journal entry do we use to record a fair value adjustment decrease?

	Dr	Cr
Unrealized Holding Loss	xx
Fair Value Adjustment		xx

What journal entry do we use to record the sale of a discounted bond which has an end result of a gain?

	Dr	Cr
Cash	xx
Discount on bond	xx
Investment on bond		xx
Gain		xx

What journal entry do we use to record the sale of a discounted bond which has an end result of a loss?

	Dr	Cr
Cash	xx
Discount on bond	xx
Loss	xx
Investment on bond		xx

What journal entry do we use to record the sale of a premium bond which has an end result of a gain?

	Dr	Cr
Cash	xx
Premium on bond		xx
Investment on bond		xx
Gain		xx

What journal entry do we use to record the sale of a premium bond which has an end result of a gain?

	Dr	Cr
Cash	xx
Loss	xx
Premium on bond		xx
Investment on bond		xx

Journal entry to record the closing of an AFS sale where an unrealized holding gain was realized?

	Dr	Cr
Reclassification Adjustment (OCI)	xx
Fair Value Adjustment		xx

Journal entry to record the closing of an AFS sale where an unrealized holding loss was realized?

	Dr	Cr
Fair Value Adjustment	xx
Reclassification Adjustment (OCI)		xx