The Fish Corporation has purchased two different types of securities for its portfolio.
- The first is a stock investment in Carroll Corporation. The Fish Corporation has the intent of holding this investment for many years.
- The other investment is a debt security investment. This purchase was made because the company's analyst believes there will be changes in market interest rate and this will cause these securities to increase in value in a short period of time.
The Fish Corporation has every intention of selling the securities as soon as they have increased in value.
Write a memo to the chief financial officer explaining:
- how to account for each of these investments.
- how the reported income from these two investments is to be accounted for.
- Include additional cited research