Chapter 9 - problems

Question 1

Summary

Answer 1

Question 2

FV-NI

Answer 2

• is for trading purposes => it is considered short term => so no amortization (of a discount or a premium). The entru is blended together:
  dr. Cash
  cr. Investment income or loss

Question 3

FV-OCI

Answer 3

• when investments are disposed, previously unrealized holding gains or losses need to be transferred out of OCI/AOCI
• FC-OCI with recycling => they go into net income
• FV-OCU without recycling => they go directly to RE

Question 4

Cost/amortized cost

Answer 4

• the only method that amortized Discount/Premium