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On September 30, Franz Corporation notices a decline in value of its investment in held-to-maturity bonds that it believes to be other than temporary. On that date, the carrying value of the bonds is $38,
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14 votes
14 votes
On September 30, Franz Corporation notices a decline in value of its investment in held-to-maturity bonds that it believes to be other than temporary. On that date, the carrying value of the bonds is $38,500 and the fair value is $22,980.

Required:
Prepare the journal entry to record the impairment.

User Ddg
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1 Answer

12 votes
12 votes

Answer:

Dr Loss on Impairment $15,520.00

Cr Maturity Debt Securities $15,520.00

Step-by-step explanation:

Preparation of the journal entry to record the impairment.

Journal entry

Sep. 30

Dr Loss on Impairment $15,520.00

Cr Maturity Debt Securities $15,520.00

($38,500-$22,980=$15,520)

(To record the impairment)

User Nikobelia
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