On February 18, 2018, Union Corporation purchased $1,491,000 of IBM bonds. Union will hold the bonds indefinitely, and may sell them if their price increases sufficiently. On December 31, 2018, and December 31, 2019, the market value of the bonds was $1,449,000 and $1,512,000, respectively. Prepare the adjusting entry for December 31, 2018 and 2019. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

On December 31, 2018: Debit Loss on available for sale security for $42,000; and Credit Available for sale investment for $42,000.

On December 31, 2019: Debit Available for sale investment $63,000; Credit Loss on available for sale security for $42,000; and Credit Gain on available for sale of securities for $21,000.

Explanation:

Since the bonds are held for trading purpose, they therefore fall under the category of available for sale investment.

The adjusting entry for December 31, 2018 and 2019 will therefore look as follows:

Date            Account Title                                           Debit ($)       Credit ($)  

Dec. 2018   Loss on available for sale security (w.1)   42,000

                   Available for sale investment                                      42,000

                   (To record change in the value of IBM bonds.)                            

Dec. 2019  Available for sale investment                    63,000

                   Loss on available for sale security                              42,000

                  Gain on available for sale of securities (w.2)               21,000

                  (To record gain on fair value of IBM bonds.)                                

Workings:

w.1: Loss on available for sale security = Purchase price - Market value on December 31, 2018 = $1,491,000 - $1,449,000 = $42,000

w.2: Gain on available for sale of securities = Market value on December 31, 2018 - Purchase price = $1,512,000 - $1,491,000 = $21,000

Note:

The loss and and for each of the years 2018 and 2019 respectively are recorded under Other Comprensive Income (OCI) in the Income Statement.

sound is invisible, but sometimes we can feel it. when a kettle-drum is thumped with a stick that time the tight drum skin moving up and down very quickly for some time and then it pumped sound waves into the air. loudspeakers also work in a similar manner.

components of a speaker:

electromagnet

in order to translate an electrical signal into an audible sound, an electromagnet is used in looudspeakers

  suspension

suspension is used to   center the voice coil in the gap of the magnet and it exerts a restoring force to keep it there. suspension is used to limits the maximum mechanical excursion of the diaphragm and voice coil.

voice coil

voice coil is a coil of wire which is attached to the apex of a loudspeaker cone. it provides the motive force to the cone by the reaction of a magnetic field to the current passing through it.

cone

in a   loudspeaker, a   thin, semi-rigid membrane attached to the voice coil, which moves in a magnetic gap due to which it vibrates   and produced sound. it is known as diaphragm and it can also be called a cone, though not all speaker diaphragms are cone-shaped.

surround

surround is also known as front suspension. surround is used to join the cone to the chassis. together with the suspension it controls the cone excursion, and it is also used to   determine how energy which is   travelling through the cone is absorbed, and how the speaker limits when it reaches the ends of its travel.

dustcap

dustcap is used to protect the voice coil from dust and dirt. it is a part of the cone.

how speaker work

the outer part of the cone is fastened to the outer part of the loudspeaker's circular metal rim. the inner part is fixed to   voice coil that sits just in front of a permanent magnet . when loudspeaker is hooked up to a stereo, electrical signals feed through the speaker cables into the coil. it will convert the coil into an electromagnet magnet . when electricity flows back and forth in the cables, the electromagnet either repels or attract the permanent magnet. this moves the coil back and forth, and it pull and push the loudspeaker cone. like a drum skin vibrating back and forth, the moving cone pumps sounds out into the air.in this way loudspeakers works.

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explanation: