Marigold Corporation has elected to use the fair value option for one of its notes payable. The note was issued at an effective rate of 10% and has a carrying value of $15,000. At year-end, Marigold’s borrowing rate (credit risk) has declined; the fair value of the note payable is now $16,300. Determine the unrealized holding gain or loss on the note. Prepare the entry to record any unrealized holding gain or loss.

Marigold Corporation has elected to use the fair value option for one of its notes payable. The note was issued at an effective rate of 10% and has a carrying value of $15,000. At year-end, Marigold’s borrowing rate (credit risk) has declined; the fair value of the note payable is now $16,300. Determine the unrealized holding gain or loss on the note. Prepare the entry to record any unrealized holding gain or loss.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 16P

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