Intermediate Accouting 2: ACCT 311
The following information is available for an enterprise’s security investments as of December 31, 2008:
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| Original | Allowance |
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| Investment | Cost | 12/31/2007 | Classification | 12/31/2008 |
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| Costco stock | $ 40,000 | $3,000 dr. | SAS | $ 39,000 |
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| Wal-Mart bonds | $ 30,000 | $ 2,000 cr. | TS | $ 32,000 |
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| The Wal-Mart bonds were purchased at par value. |
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| SAS = securities available-for-sale |
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| TS = trading securities |
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What is the 2008 holding gain or loss recognized in 2008 earnings and directly to stockholders’ equity?
a. | Earnings: $4,000 loss Stockholders’ Equity: $4,000 loss |
b. | Earnings: $4,000 gain Stockholders’ Equity: $4,000 gain |
c. | Earnings: $4,000 loss Stockholders’ Equity: $4,000 gain |
d. | Earnings: $4,000 gain Stockholders’ Equity: $4,000 loss |
12 years ago 3
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