Maddow and Wells, Inc. purchased equity securities in 2018. Themanagement of the company has decided that the securities will notbe sold immediately, but will be held for at least three years.This will allow MW to maximize the potential gains from holding thesecurities. The new accountant at the company wants to classify thesecurities as held-to-maturity because they will be held for threeyears; the company has never held securities for this long before.How would you advise the management of the company to classify thesecurities? At the end of each reporting year, how will thesecurities be recognized on the company’s books? Support yourresponse with an appropriate ASC reference (ASC xxx-xx-xx-x) or ASU(accounting standard update).
