In Its First Year of Operations,Largo Co

question 157

Essay

In its first year of operations,Largo Co.purchased bonds of MacDermott Corp.with a cost of $125,000 and a market value of $127,000.Largo also purchased bonds of Armistead with a cost of $25,000 and a market value of $24,700.These are classified as long-term available-for-sale securities.Prepare the journal entry to record the market value of the investments as of December 31.

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Definitions:

Electronegativity Difference

The measure of the ability of an atom in a molecule to draw bonding electrons to itself compared to another atom in the molecule, determining the polarity of the bond.

Polar Covalent

A type of chemical bond where a pair of electrons is unequally shared between two atoms, leading to a distribution of electric charge across the molecule.

Nonpolar Molecules

Molecules that have an even distribution of electrons, resulting in no permanent dipole moments, and typically exhibit little to no interaction with polar substances.

Nonpolar Bonds

Nonpolar bonds occur between atoms with similar electronegativities, resulting in equal sharing of electrons and no significant charge distribution across the bond.