Chapter 14 - Investmenst in stocks and bonds. This chapter presents the following content: Overview of FASB No. 115, short-term investments, short-term investments in stocks (trading), unrealized gain or loss (trading), subsequent sale (trading),. | Investments in Stocks and Bonds Overview of FASB No. 115 Requires most investment securities to be valued at market Securities classified into three categories Held-to-maturity Only debt securities that will be held to maturity date Overview of FASB No. 115 Trading securities Debt and equity securities that are purchased and sold for short-term profits Available-for-sale All debt and equity securities not classified as held-to-maturity or trading Short-term Investments Readily saleable securities Management intends to sell within one year All three of FASB 115 categories apply Short-term Investments in Stocks (Trading) Purchase Record cost in Short-term Investment account Cash dividends Record revenue upon receipt of dividend Stock dividends and splits No entry and calculate new cost Short-term Investments in Stocks (Trading) Sale Increase Cash for proceeds Decrease Investment account by cost Record Realized Gain(Loss) on Investment for difference Unrealized Gain or Loss (Trading) . | Investments in Stocks and Bonds Overview of FASB No. 115 Requires most investment securities to be valued at market Securities classified into three categories Held-to-maturity Only debt securities that will be held to maturity date Overview of FASB No. 115 Trading securities Debt and equity securities that are purchased and sold for short-term profits Available-for-sale All debt and equity securities not classified as held-to-maturity or trading Short-term Investments Readily saleable securities Management intends to sell within one year All three of FASB 115 categories apply Short-term Investments in Stocks (Trading) Purchase Record cost in Short-term Investment account Cash dividends Record revenue upon receipt of dividend Stock dividends and splits No entry and calculate new cost Short-term Investments in Stocks (Trading) Sale Increase Cash for proceeds Decrease Investment account by cost Record Realized Gain(Loss) on Investment for difference Unrealized Gain or Loss (Trading) Valuation for financial statements Adjust Investment account to market Record Unrealized Gain(Loss) for change Unrealized gain or loss shown on income statement Subsequent Sale (Trading) When sold after adjustment to market Realized gain or loss is difference between market at date of sale and amount security adjusted to at last financial statement date Short-term Investments in Bonds (Trading) Purchase Record cost in Short-term Investment account Interest accruals and receipts Interest revenue accrued at appropriate dates No amortization of premium or discounts Short-term Investments in Bonds (Trading) Sale Increase Cash for proceeds Accrue interest revenue to date of sale Decrease Investment account by cost Record Realized Gain(Loss) on Investment for difference Unrealized Gain or Loss (Trading) Valuation for financial statements Adjust Investment account to market Record Unrealized Gain(Loss) for change Unrealized gain or loss shown on income statement Subsequent Sale (Trading) When .
