Accounting ACCT 2610 Lecture Notes - Lecture 22: Controlling Interest, Equity Method, Income Statement

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Lecture 23-24: reporting and interpreting investments in other companies: investments, passive investments, debt is always considered a passive investment, for bonds/debt held to maturity, use the amortized cost method, purchase of security: dr. investment (held to maturity), cr. Cash: recording interest revenue: dr. cash, cr. Interest revenue: principal payment at maturity: dr. cash, cr. Available for sale (afs) securities: trading security = investments in stocks or bonds that are actively traded with the objective to generate profits in the short-term. Comprehensive income (oci), a stockholder"s equity account: fair value method accounting: Gain on sale of investment (+g, +se) or. Gain on sale of investments (+g, +se) or. Dr. loss on sale of investments (+l, -se) If the security is a debt security, dividend revenue will be replaced with. Cash: receipt of dividends: dr. cash, cr. Investment in affiliates (-a: earnings of affiliates: dr. investment in affiliates (+a), cr.

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