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27 July, 03:04

Ayayai Co. has a held-to-maturity investment in the bonds of Schuyler Corp. with a carrying value of $56,800. Ayayai determined that due to poor economic prospects for Schuyler, the bonds have decreased in value to $48,100. It is determined that this loss in value is uncollectible. Prepare the journal entry, if any, to record the reduction in value.

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  1. 27 July, 03:34
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    journal entry are as given below

    Explanation:

    given data

    carrying value = $56,800

    bonds decreased value = $48,100

    solution

    we know that here impairment loss for organization when future estimate value of assets is less than carrying value of assets

    and all loss and expenses are debit

    and by the impairment loss value of investment decline so maturity id credit

    so here

    impairment loss is

    impairment loss = carrying loss - decrease value ... 1

    impairment loss = $56,800 - $48,100

    impairment loss = $8700

    so journal entry are as

    date title Debit Credit

    Impairment loss $8700

    investment held to maturity $8700
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Home » Business » Ayayai Co. has a held-to-maturity investment in the bonds of Schuyler Corp. with a carrying value of $56,800. Ayayai determined that due to poor economic prospects for Schuyler, the bonds have decreased in value to $48,100.
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