E17-1 (Investment Classifications) For the following investments identify whether they are:
1. Trading Securities
2. Available-for-Sale Securities
3. Held-to-Maturity Securities
Each case is independent of the other.
(a) A bond that will mature in 4 years was bought 1 month ago when the price dropped. As soon asthe value increases, which is expected next month, it will be sold.
(b) 10% of the outstanding stock of Farm-Co was purchased. The company is planning on eventuallygetting a total of 30% of its outstanding stock.
(c) Bonds were purchased in December of ths year. The bonds are expected to be sold n January of next year
(d) Bonds that will mature in 5 years are purchased. The company would like to hold them until theymature, but money has been tight recently and they may need to be sold.
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