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24 June, 13:36

On January 1, 2019, a company's balance sheet reports its investments in debt securities as follows: Assets Investment in HTM securities: $207,544

Supporting information: The HTM securities are $200,000 face value securities purchased on January 1, 2017, at a yield of 4%. The securities have a 4-year total life and pay interest annually on December 31, at a coupon rate of 6%.

Required:

Investment in HTM securities reported on the December 31, 2019 balance sheet is:

a. $203,846

b. $204,938

c. $207,544

d. $207,997

+3
Answers (1)
  1. 24 June, 13:52
    0
    correct option is a. $203,846

    Explanation:

    given data

    Assets Investment = $207,544

    face value = $200,000

    yield = 4%

    coupon rate = 6%

    to find out

    Investment in HTM security report on balance sheet

    solution

    we get here balance that is express as

    balance = Assets Investment + Interest @4 - Interest Paid ... 1

    balance = $207,544 + ($207544 * 4%) - ($200000 * 6%)

    balance = $207,544 + $8,302 - $12,000

    balance = $203,846

    so correct option is a. $203,846
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Home » Business » On January 1, 2019, a company's balance sheet reports its investments in debt securities as follows: Assets Investment in HTM securities: $207,544 Supporting information: The HTM securities are $200,000 face value securities purchased on January 1,
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