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    Long term investment

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    E 12-6

    On February 18, 2011, Union Corporation purchased 10,000 shares of IBM common stock as a long-term investment at $60 per share. On December 31, 2011, and December 31, 2012, the market value of IBM stock is $58 and $61 per share, respectively.

    Required:

    1.What is the appropriate reporting category for this investment? Why?

    2.Prepare the adjusting entry for December 31, 2011.

    3.Prepare the adjusting entry for December 31, 2012.

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    https://brainmass.com/business/finance/long-term-investment-370790

    Solution Preview

    1.What is the appropriate reporting category for this investment? Why?

    Since the stock is purchased as a long term investment, it would be reported as an available for sale security

    2.Prepare the adjusting entry for ...

    Solution Summary

    The solution explains how to record the long term investment and prepare the adjusting entry

    $2.19

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