Chapter 9 - Investments Summary

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Published on 1 Jul 2011
School
Ryerson University
Department
Accounting
Course
ACC 414
Professor
Chapter 9 Investments
Purchase Commissio
nsInterestDividendsSell Investment
FV-NIWhat you
paidExpenseCR Investment
Income/Loss for
interest receive (if not
separately)
If separately, record:
CR Interest Income
CR Investment
Income/Loss CR: Investment @ its last Carrying Value
Record gain/loss through Investment
Income/Loss
FV-OCIChoice
expense or
capitalize
Amortize
premium/discount
CR Interest Income @
effective rate
CR Dividend
Income1.Bring Investment up to FV on day of
sale
2.Record cash & CR Investment
3.Realize Gain/Loss (Recycling),
CR Retained Earnings (no recycling)
Amortized
CostCalculate
NPV (bond)CapitalizeN/A
Cost: CR Dividend
Income
1.Accrue interest
2.Record Cash & Gain/Loss based on
last carrying value
EquityN/AN/ACR Investment in
your company1.Accrue interest
2.Record cash & Gain/Loss
Consolidat
ion N/AN/A EliminateN/A
Adjusting Entries
Interest
ReceivableIncome of Investee FV AdjustmentOwnership
FV-NIDR Interest
Receivable
CR Investment
Income/Loss
DR/CR Trading Investment
DR/CR Investment Income/Loss
(difference between CV FV)
< 20%
FV-OCIDR Interest
Receivable
CR Interest
Income
DR/CR Investment
DR/CR Holding Gains(Loss) through OCI
(difference between CV FV)
< 20%
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