Pearl Company in its first year of operations provides the following information related to one...
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Accounting
Pearl Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2025.
Amortized cost $51,800
Fair value 43,600
Expected credit losses 12,950
1) What is the amount of the credit loss that Pearl should report on this available-for-sale security at December 31, 2025?
Amount of the credit loss $ _____________
2) Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2025.
3) Assume that the fair value of the available-for-sale security is $56,600 at December 31, 2025, instead of $43,600. What is the amount of the credit loss that Pearl should report at December 31, 2025?
Amount of the credit loss $ ___________
4) Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2025.
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