Trading Securities

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4. Decided to sell the bond earlier with different price.

First, Adjust trading securities to fair value. FV we did prior - ? <----- this will be the new FV ------------------- Amortized cost - how much they are selling it now Cash Discount/Premium on bond investments --Investment in bonds --Fair value adj.

Stated rate < Market Rate

Discount bond

3. Any additional adjustments needed journal entries are

Amortized cost = Acquired investment-( D/P on bond investment- interest revenue) Stated fair value of the bonds - amortized cost = Fair value adj Fair value adj ----Gain/Loss on investments(unrealized, NI)

2. Recording interest at effective market rate journal entries are

Cash --Discount/Premium on bond investment --Interest Revenue

1. Recording an investment journal entries are

Investment in bonds Discount/Premium on bond investment --------Cash

stated rate > market rate

Premium bond

Trading Securities are generally sold

within hours or days

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