Safe Investment Company (SIC)began operations on January 1,2016.It acquired the following investments:

SIC earned interest of $12,000 during 2016.Dividends of $16,000 were declared on the shares it owned during 2016.Of that amount,$9,000 was received in December 2016 and $7,000 was received in January 2017 (note that the ex-dividend date for these shares was prior to the end of the year).At what value would SIC's bonds (which were purchased at par)be recorded at in the balance sheet on December 31,2016?
A)$183,000
B)$195,000
C)$198,000
D)$207,000

Question

Safe Investment Company (SIC)began operations on January 1,2016.It acquired the following investments:

SIC earned interest of $12,000 during 2016.Dividends of $16,000 were declared on the shares it owned during 2016.Of that amount,$9,000 was received in December 2016 and $7,000 was received in January 2017 (note that the ex-dividend date for these shares was prior to the end of the year).At what value would SIC's bonds (which were purchased at par)be recorded at in the balance sheet on December 31,2016?
A)$183,000 
B)$195,000 
C)$198,000 
D)$207,000

Quizplus · Accepted Answer

B)instrument is recorded at amortized cost (par)- no fair value change recorded

Safe Investment Company (SIC)began Operations on January 1,2016