Screenshot 2023-12-30 at 3.26.41 PM

‫‪ACC310‬‬
‫‪CHAPTER 17‬‬
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‫‪@Economicslearning‬‬ ‫ھذه اﻟدورة ﺗم ﻓﺗﺣﮭﺎ ﺑﮭدف دراﺳﺔ اﻟﻣﻧﮭﺞ اﻟﻣطﻠوب ‪ AC310‬ﺑﻘﯾﺎدة اﻷﺳﺗﺎذة ﻣرﯾم ﻋﻠﻲ‬ ‫‪1‬‬
‫ﯾﺣﻖ ﻟﻠطﺎﻟب اﻟﻣﺳﺟل ﺑﺎﻟدورة اﻻﺳﺗﻔﺎدة ﻣن اﻟﻣﻠﺧﺻﺎت واﻟﺷروﺣﺎت واﻟﻔﯾدﯾوھﺎت ﻟﻧﻔﺳﮫ ﻓﻘط‪ ،‬وﻻ ﯾﺣﻖ ﻟﮫ ﻣﺷﺎرﻛﺗﮭﺎ ﻣﻊ اﻵﺧرﯾن أو‬
‫‪2‬‬
‫ﺑﯾﻌﮭﺎ أو ﺗوزﯾﻌﮭﺎ أو ﺗﻧﺎﻗﻠﮭﺎ أو اﻻﻗﺗﺑﺎس ﻣﻧﮭﺎ أو اﻟﺗدرﯾس ﻣن ﺧﻼﻟﮭﺎ‪.‬‬
‫‪ELC Support 36195555‬‬ ‫ﺟﻣﯾﻊ وﺻﻼت ﺣﺻص اﻟﺗدرﯾس ﻋن ﺑﻌد )‪ (Online‬ھﻲ ﺧﺎﺻﺔ ﺑﺎﻟﻣﺷﺗرﻛﯾن ﺑﮭذه اﻟدورة ﻓﻘط وﻻ ﯾﺣﻖ ﻷﺣد ﻣﺷﺎرﻛﺗﮭﺎ ﻣﻊ اﻟﻐﯾر‪.‬‬
‫‪3‬‬
‫ﯾﻣﻧﻊ ﺗرك اﻟﻣﻠﺧﺻﺎت ﻓﻲ أﻣﺎﻛن ﺗﺳﻣﺢ ﺑﮭﺎ ﻟﻠﻐﯾر ﻣن اﻻﺳﺗﻔﺎدة ﻣﻧﮭﺎ أو اﺳﺗﻐﻼﻟﮭﺎ )ﻣﺛل ﺗرﻛﮭﺎ ﻋﻧد ﻗﺎﻋﺔ اﻻﻣﺗﺣﺎن أو ﺑﺎﻟﻣﻛﺗﺑﺔ أو‬
‫‪4‬‬
‫ﺑﺎﻟﻛﻠﯾﺔ‪ ...‬إﻟﺦ(‪.‬‬
‫ﯾﺗﻌﮭد اﻟطﺎﻟب ﻓﻲ ﻧﮭﺎﯾﺔ اﻟﻔﺻل اﻟدراﺳﻲ أو ﻗﺑل ذﻟك ﺑﺎﻟﺗﺧﻠص ﻣن ﺟﻣﯾﻊ اﻟﻣﻠﺧﺻﺎت ﻋن طرﯾﻖ ﺗﻣزﯾﻘﮭﺎ ﺑطرﯾﻘﺔ ﻻ ﯾﻣﻛن اﻻﺳﺗﻔﺎدة‬
‫ﻣﻧﮭﺎ‪ ،‬ﻛﻣﺎ ﯾُﻣﻧﻊ ﺗﺳﺟﯾل اﻟﻣﺣﺎﺿرات ﺣﯾث ﺳﯾﺗوﻟﻰ اﻷﺳﺗﺎذ اﻟﻣﻌﻧﻲ ﺑﺗﺳﺟﯾل اﻟﺣﺻص وﻓﺗﺢ اﻟﻣﺟﺎل ﻟطﻼب اﻟدورة ﺑﻣﺷﺎھدﺗﮭﺎ ﻋدة‬ ‫‪5‬‬
‫ﻣرات طوال ﻓﺗرة اﺷﺗراﻛﮭم‪.‬‬
‫أي ﻣﺷﺎرﻛﺔ ﻟﻠﻣﻠﺧﺻﺎت أو وﺻﻼت اﻟﺣﺻص ﻣﻊ اﻟﻐﯾر ﺗﻌد ﻣﺧﺎﻟﻔﺔ ﻟﺣﻘوق اﻟﺑث واﻟﻧﺷر ﻟﻣﻣﻠﻛﺔ اﻟﺑﺣرﯾن وﺳﯾﻠﺗزم اﻟطﺎﻟب اﻟذي ﺳرﺑﮭﺎ‬
‫أو ﺗﺳﺑب ﻓﻲ ﺗﺳرﯾﺑﮭﺎ ﺑﺗﺣﻣل ﻏراﻣﺔ ﻣﺎﻟﯾﺔ ﻣﻘدارھﺎ ‪ ١٠٠‬دﯾﻧﺎر ﻋن ﻛل ﻣذﻛرة أو ﻓﯾدﯾو ﯾﺗم ﺗﺳرﯾﺑﮫ‪ ،‬ﺑﺎﻹﺿﺎﻓﺔ إﻟﻰ ﺣﻖ اﻟﻣرﻛز ﺑﺎﺗﺧﺎذ‬ ‫‪6‬‬
‫اﻹﺟراءات اﻟﻘﺎﻧوﻧﯾﺔ اﻷﺧرى‪.‬‬
‫‪© All rights reserved for Economic Learning Center W.L.L. The‬‬ ‫© ﺣﻘوق اﻟﻧﺷ ر ﻣﺤﻔﻮﻇﺔ ﻟﻤﺮﻛﺰ اﻟﺘﻌﻠﻢ اﻹﻗﺘﺼﺎدي ذ‪.‬م‪.‬م‪ .‬ﺣﯾث ﯾﺣﻖ ﻟﻠﻣﺳ ﺟل ﺑﺎﻟدورة‬
‫‪enrolled students for ELC courses have the right to benefit from it‬‬ ‫اﻹﻧﺗﻔﺎع ﻣﻧﮭﺎ ﻟﻧﻔﺳ ﮫ ﻓﻘط ﻟﻠدراﺳ ﺔ‪ ،‬وﻻ ﯾﺟوز ﻟﮫ ﺑﯾﻊ ھذه اﻟﻣذﻛرات‪ ،‬أو ﺗﺻ وﯾرھﺎ ‪/‬‬
‫‪for himself only. No part of this notes may be resold / copied /‬‬ ‫ﺗﻧ ﺎﻗﻠﮭ ﺎ ‪ /‬اﻟﺗﺑرع ﺑﮭ ﺎ ‪ /‬طﺑ ﺎﻋﺗﮭ ﺎ ﻟﻠﻐﯾر‪ ،‬أو ﺗ درﯾس اﻟﻐﯾر ﻣن ﺧﻼﻟﮭ ﺎ‪ ،‬أو اﻟﻧﻘ ل ﻣن‬
‫‪spread / donated / and/or re-printed to others, or taught to the‬‬ ‫ﻣﺣﺗوﯾﺎﺗﮭﺎ ﺑﺄي طرﯾﻘﺔ ﻛﺎﻧت‪ ،‬إﻻ ﺑﺈذن ﻣﻛﺗوب ﻣن إدارة اﻟﻣرﻛز‪.‬‬
‫‪others through it, or utilized them in any form or means without a‬‬
‫‪written permission from ELC management.‬‬
Chapter 17
Investments
Chapter 17 Learning Objectives

1 Describe the accounting framework for financial assets
2 Understand the accounting for debt investments at amortized cost.
3 Understand the accounting for debt investments at fair value.
4 Describe the accounting for the fair value option.
5 Understand the accounting for equity investments at fair value.
Explain the equity method of accounting and compare it to the fair
6
value method for equity investments.
Describe the accounting for transfer of investments between
7
categories.
Write Your Notes

Economics Learning Center ©
Chapter 17
First Semester 2023/2024
Ex1: On January 1, 2015, Ellison Company purchased 12% bonds, having a maturity value of $800,000,
for $860,652. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2015,
and mature January 1, 2020, with interest receivable December 31 of each year. Ellison’s business
model is to hold these bonds to collect contractual cash flows.
Instructions
(a) Prepare the journal entry at the date of the bond purchase.
Date Debit Credit
(b) Prepare a bond amortization schedule through 2016.
Interest
Date Cash Received Amortization Carrying Value
Revenue
(c) Prepare the journal entry to record the interest received and the amortization for 2015.
Date Debit Credit
(d) Prepare any entries necessary at December 31, 2015, using the fair value option, assuming
the fair value of the bonds is $860,000.
Date Debit Credit
.‫م‬.‫م‬.‫© ﺣﻘوق اﻟﻧﺷر ﻣﺤﻔﻮﻇﺔ ﻟﻤﺮﻛــــــﺰ اﻟﺘﻌﻠـــــــﻢ اﻹﻗﺘﺼـــــــﺎدي ذ‬ 1

© All rights reserved for Economic Learning Center W.L.L.
Chapter 17
(e) Prepare any entries necessary at December 31, 2016, using the fair value option, assuming
the fair value of the bonds is $840,000.
Date Debit Credit
Ex2: On January 1, 2015, West Co. purchased $160,000 of 6% bonds for $168,300 (a 5% effective
interest rate) as a non-trading investment. Interest is paid on July 1 and January 1 and the bonds
mature on January 1, 2020.
Instructions
(a) Prepare the journal entry on January 1, 2015.
Date Debit Credit
(b) The bonds are sold on November 1, 2015 at 105 plus accrued interest. Record amortization
and interest revenue on the appropriate dates by the effective-interest method (round to
the nearest dollar). Prepare all entries required to properly record the sale.
Date Debit Credit

Chapter 17
Ex3: On January 1, 2015, Kirmer Corp. purchased $450,000 of 6% bonds, interest payable on
January 1 and July 1, for $428,800 (a 7% effective interest rate). The bonds mature on January 1,
2021. Record amortization and interest revenue on the appropriate dates by the effective-interest
method (round to the nearest dollar). (Assume bonds are non-trading.)
Instructions:
(a) Prepare the entry for January 1, 2015.
Date Debit Credit
(b) The bonds are sold on October 1, 2015 for $427,000 plus accrued interest. Prepare all
entries required to properly record the sale.
Date Debit Credit

Chapter 17
Exercise 17-3
On January 1, 2015, Roosevelt Company purchased 12% bonds having a maturity value of $500,000
for $537,907.40. The bonds provide the bondholders with a 10% yield. They are dated January 1,
2015, and mature January 1, 2020, with interest receivable December 31 of each year. Roosevelt’s
business model is to hold these bonds to collect contractual cash flows.
Instructions
Date Debit Credit
(b) Prepare a bond amortization schedule.
Interest
Revenue
(c) Prepare the journal entry to record the interest received and the amortization for 2015.
Date Debit Credit
(d) Prepare the journal entry to record the interest received and the amortization for 2016.
Date Debit Credit

Chapter 17
Exercise 17-4
On January 1, 2015, Morgan Company acquires $300,000 of Nicklaus, Inc., 9% bonds at a price of
$278,384. The interest is payable each December 31, and the bonds mature December 31, 2017. The
investment will provide Morgan Company a 12% yield. The bonds are classified as held-for collection.
Instructions
(a) Prepare a 3-year schedule of interest revenue and bond discount amortization. (Round to
nearest cent.)
Interest
Revenue
(b) Prepare the journal entry for the interest receipt of December 31, 2016, and the discount
amortization.
Date Debit Credit

Chapter 17
Exercise 17-5
On January 1, 2015, Roosevelt Company purchased 12% bonds having a maturity value of $500,000
for $537,907.40. The bonds provide the bondholders with a 10% yield. They are dated January 1,
2015, and mature January 1, 2020, with interest receivable December 31 of each year.
Roosevelt has an active trading strategy for these bonds. The fair value of the bonds at December 31
of each year-end is as follows.
2015 $534,200 2018 $517,000

2016 $515,000 2019 $500,000
2017 $513,000
Instructions
Date Debit Credit
(b) Prepare a bond amortization schedule.
Interest
Revenue
(c) Prepare the journal entries to record the interest received and recognition of fair value for
2015.
Date Debit Credit

Chapter 17
(d) Prepare the journal entry to record the recognition of fair value for 2016.
Date Debit Credit
Exercise 17-6
Refer to the information in Exercise 17-3 and assume that Roosevelt elected the fair value option for
this held-for-collection investment.
Instructions
(a) Prepare any entries necessary at December 31, 2015, assuming the fair value of the bonds
is $540,000.
Date Debit Credit
(b) Prepare any entries necessary at December 31, 2016, assuming the fair value of the bonds
is $525,000.
Date Debit Credit


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‫‪ACC310‬‬

‫‪www.ELCbh.com‬‬ ‫ﺗذﻛﯾر ﺑﺷروط وأﺣﻛﺎم اﻟدورة‪:‬‬

Chapter 17 Learning Objectives

Write Your Notes

Date Debit Credit

(b) Prepare a bond amortization schedule through 2016.

Date Debit Credit

Date Debit Credit

.‫م‬.‫م‬.‫© ﺣﻘوق اﻟﻧﺷر ﻣﺤﻔﻮﻇﺔ ﻟﻤﺮﻛــــــﺰ اﻟﺘﻌﻠـــــــﻢ اﻹﻗﺘﺼـــــــﺎدي ذ‬ 1

Date Debit Credit

(a) Prepare the journal entry on January 1, 2015.

Date Debit Credit

Date Debit Credit

.‫م‬.‫م‬.‫© ﺣﻘوق اﻟﻧﺷر ﻣﺤﻔﻮﻇﺔ ﻟﻤﺮﻛــــــﺰ اﻟﺘﻌﻠـــــــﻢ اﻹﻗﺘﺼـــــــﺎدي ذ‬ 2

(a) Prepare the entry for January 1, 2015.

Date Debit Credit

Date Debit Credit

.‫م‬.‫م‬.‫© ﺣﻘوق اﻟﻧﺷر ﻣﺤﻔﻮﻇﺔ ﻟﻤﺮﻛــــــﺰ اﻟﺘﻌﻠـــــــﻢ اﻹﻗﺘﺼـــــــﺎدي ذ‬ 3

Date Debit Credit

(b) Prepare a bond amortization schedule.

Date Debit Credit

Date Debit Credit

.‫م‬.‫م‬.‫© ﺣﻘوق اﻟﻧﺷر ﻣﺤﻔﻮﻇﺔ ﻟﻤﺮﻛــــــﺰ اﻟﺘﻌﻠـــــــﻢ اﻹﻗﺘﺼـــــــﺎدي ذ‬ 4

Date Debit Credit

.‫م‬.‫م‬.‫© ﺣﻘوق اﻟﻧﺷر ﻣﺤﻔﻮﻇﺔ ﻟﻤﺮﻛــــــﺰ اﻟﺘﻌﻠـــــــﻢ اﻹﻗﺘﺼـــــــﺎدي ذ‬ 5

2015 $534,200 2018 $517,000

Date Debit Credit

(b) Prepare a bond amortization schedule.

Date Debit Credit

.‫م‬.‫م‬.‫© ﺣﻘوق اﻟﻧﺷر ﻣﺤﻔﻮﻇﺔ ﻟﻤﺮﻛــــــﺰ اﻟﺘﻌﻠـــــــﻢ اﻹﻗﺘﺼـــــــﺎدي ذ‬ 6

Date Debit Credit

Date Debit Credit

Date Debit Credit

.‫م‬.‫م‬.‫© ﺣﻘوق اﻟﻧﺷر ﻣﺤﻔﻮﻇﺔ ﻟﻤﺮﻛــــــﺰ اﻟﺘﻌﻠـــــــﻢ اﻹﻗﺘﺼـــــــﺎدي ذ‬ 7

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