(Impairment)
Elaina Corp has the following investments as of 12/31/17
Investments in Common Stock of Laser Company $1,500,000
Investments in Debt securities of Foursquare Company $3,300,000
In both investments, the carrying value and the fair value of these two investments are the same at 12/31/17. Elaina's stock investments does not result in significant influence on the operations of Laser Company. Elaina's debt investment is considered held-to-maturity. At 12/31/18, the shares in Laser Company are valued at $1,100,000; the debt investment securities of FourSquare are valued at $2,500,000. Assume that these investments are considered impaired.
a) Prepare the journal entries to record the impairment of these two securities at 12/31/18.
b) Assuming the fair value of the laser shares is $1,400,000 and the value of its debt investmdents is $2,950,000, what entries, if any, should be recorded in 2019 related to impairment?
c) Prepare the journal entries at 12/31/18, assuming these securities are not impaired. (ignore interest)
d. Assue that the debt investment in FourSquare Company was available-for-sale and the expected credit loss was $900,000. Prepair the Journal Entry yo record this impairment on 12/31/18.