F-4 Simulations Flashcards
How to record an unrealized loss in held to maturities
Dr. Credit Loss
Cr. Allowance for credit losses
How to record sale of an equity security
Dr. Cash - amount sold for
Dr. Realized loss
Cr. Equity securities for original cost bought for
Cr. Realized gain
with valuation accounts if there is a gain you debit and if there is a loss you credit
Transfer from available for sale securities to held to maturity
It is recorded as FV, but not current then the amortized gain is moved from OCI to the income statement
Stock becoming held to maturity
Stocks don’t mature so that can’t happen
Journal entries for bond discounts
At purchase
Dr. Investment in Bond
Cr. Discount
Cr. Cash
Amortization
Dr. Cash
Dr. Discount
Cr. Interest Revenue
Journal entries from bond premiums
At purchase
Dr. Investment in Bond
Dr. Premium
Cr. Cash
Amortization
Dr. Cash
Cr. Premium
Cr. Interest Revenue
Purchase price of stock with legal fees included
Could be added to the the overall purchase price of stock or have a separate line in the journal entry
How to account for registration fees when you issue shares to purchase shares of another company
It reduces the APIC Dr. Investment Dr. Legal expense* Cr. Common Stock Cr. APIC - reduce by registration fee Cr. Cash - legal fees and registration fees
Dividend income journal entry normally and with return of invested capital
Normal
Dr. Cash
Cr. Dividend revenue
Return of Investment capital
Dr. Cash
Cr. Dividend revenue
Cr. Investment account
Equity method journal entries
Initial Investment
Dr. Investment
Cr. Cash or Payable
% Net Income
Dr. Investment
Cr. Equity in earnings
% of Dividends
Dr. Cash
Cr. Investment
How to journalize an increase in FV of some thing like equipment for equity method
Dr. Equity earnings
Cr. Investment
How to account for preferred stock for equity method
You multiply the “cumulative %” by the total and subtract from net income; then you that number by % equity method
Inventory Consolidation Table
———————Should be—–P—–S—–Eliminations
Sales(dr)
COGS(cr)
Inventory(cr)
Depreciable Asset Consolidation Table
-----------------Should be-----What is-----Difference Equipment Accum Dep Depreciation Gain or R/E
Acquisition date eliminating entry for consolidations
CAR IN BIG
Debit “CAR”: Equity accounts
Credit “IN”: Investment in sub & noncontrolling interest
Debit BIG: B/S adjustment for FV, intangibles, and goodwill
