a) Dawson elects to use the fair value option whenever possible.


Question Description:

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a) Dawson elects to use the fair value option whenever possible. Assuming that Dawson’s net income is $100,000 in 2014 before reporting any securities gains or losses, determine Dawson’s net income for 2014. Dawson’s net income for 2014$ (b) Record the journal entry, if any, necessary at December 31, 2014, to record the fair value option for the bonds payable. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2014 Presented below is selected information related to the financial instruments of Dawson Company at December 31, 2014. This is Dawson Company’s first year of operations. Investment in debt securities (intent is to hold to maturity)$40,000$41,000 Investment in Chen Company stock800,000910,000 Bonds payable220,000 195,000

Answer

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