Stewart Enterprises has the following investments, all purchased prior to 2018. during as an for normally during 2019 (wit

Stewart Enterprises has the following investments, all purchased prior to 2018. during as an for normally during 2019 (with no select No journal entry required in the first eccount field.) had a fair value of $3.510,000, and Stewart calculated that $260,000 of the fair value decline d that $150,000 of the difference between fair value and amortized cost was a credit loss and $180.000 was a e of $210.000, 31, such that the carrying value of the Oliver 2018. the Oliver investment had a fair value of $2,210.000, and Stewart ca $2,740,000. $410,000, such that the carrying value of the Jones 31, 2018, the Jones had a fair value of $2,710,000, and Stewart calculated that $230.000 of the d had a fair value of $2.920,000, and Stewart calculated that $130,000 of the difference betweer credit loss and $480,000 is a noncredit loss

Stewart Enterprises has the following investments, all purchased prior to 2018. during as an for normally during 2019 (with no select “No journal entry required” in the first eccount field.) had a fair value of $3.510,000, and Stewart calculated that $260,000 of the fair value decline d that $150,000 of the difference between fair value and amortized cost was a credit loss and $180.000 was a e of $210.000, 31, such that the carrying value of the Oliver 2018. the Oliver investment had a fair value of $2,210.000, and Stewart ca $2,740,000. $410,000, such that the carrying value of the Jones 31, 2018, the Jones had a fair value of $2,710,000, and Stewart calculated that $230.000 of the d had a fair value of $2.920,000, and Stewart calculated that $130,000 of the difference betweer credit loss and $480,000 is a noncredit loss

Expert Answer

 

Solution:

Preparing Appropriate Adjusting Journal Entries for each Investment, to Account for the Fair Value Changes During 2018 and 2019:

1. Bee Company Investment:

Date General Journal Debit Credit
2018 Other-than-temporary impairment loss – I/S $260,000
Discount on bond investment $260,000
2018 OTT impairment loss – OCI $270,000
Fair value adjustment – Noncredit loss $270,000

2. Oliver Corporation Investment:

Date General Journal Debit Credit
2018 Net unrealized holding gains and losses – I/S $110,000
Fair value adjustment $110,000
2019 Fair value adjustment $530,000
Net unrealized holding gains and losses – I/S $530,000

3. Jones Inc., Investment:

Date General Journal Debit Credit
2018 Other-than-temporary impairment loss – I/S $230,000
Discount on Jones Bonds $230,000
2018 Net unrealized holding gains and losses – OCI $590,000
Fair value adjustment $590,000
2018 Fair value adjustment $410,000
Net unrealized holding gains and losses – OCI $410,000
2018 Net unrealized holding gains and losses – OCI $180,000
Fair value adjustment $180,000
2019 Fair value adjustment $210,000
Net unrealized holding gains and losses – OCI $210,000
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