Presented below is selected information related to the financial instruments of Sweet Company...
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Presented below is selected information related to the financial instruments of Sweet Company at December 31, 2020. This is Sweet Company's first year of operations. Investment in debt securities (intent is to hold to maturity) Investment in Chen Company stock Bonds payable Carrying Fair Value Amount (at December 31) $41,800 $42,700 784,000 893,200 234.900 210,900 (a) Sweet elects to use the fair value option for these investments. Assuming that Sweet's net income is $93,500 in 2020 before reporting any securities gains or losses, determine Sweet's net income for 2020. Assume that the difference between the carrying value and fair value is due to credit deterioration. Sweet's net income for 2020 $ (b) Record the journal entry, if any, necessary at December 31, 2020, to record the fair value option for the bonds payable. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Dec 31, 2020 Bonds Payable 24000 Loss on Impairment 24000
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