Presented below is selected information related to the financial instruments of Nash Company at December...
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Accounting
Presented below is selected information related to the financial instruments of Nash Company at December 31, 2020. This is Nash Companys first year of operations.
Carrying Amount
Fair Value (at December 31)
Investment in debt securities (intent is to hold to maturity)
$38,600
$39,600
Investment in Chen Company stock
867,900
988,200
Bonds payable
215,000
191,500
(a) Nash elects to use the fair value option for these investments. Assuming that Nashs net income is $102,500 in 2020 before reporting any securities gains or losses, determine Nashs net income for 2020. Assume that the difference between the carrying value and fair value is due to credit deterioration.
Nashs 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 0 for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
Dec. 31, 2020
What is the account for B part not Profit/Loss A/c for credit side
Answer & Explanation
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