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Chapter 13: Q9Q (page 658)

If the bonds in Question 8 are classified as available-for-sale, and they have a fair value at December 31, 2017, of $3,604,000, prepare the journal entry (if any) at December 31, 2017, to record this transaction.

Short Answer

Expert verified

Fair value adjustment debited and unrealised holding gain or loss income credited by $104,000. An unrealised gain is $104,000

Step by step solution

01

Definition of journal entry

Journal entry is the book of accounting in which company record all the transaction related to the money or monetary value.

02

Fair value adjustment entry

Date

Particulars

Debit

Credit

December 31, 2017

Fair Value Adjustment

$104,000

UnrealisedHolding Gain or Loss- Income

$104,000

(Being entry for the fair value adjustment)

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Most popular questions from this chapter

BE13-7 (L01) Kasten Inc. provides paid vacations to its employees. At December 31, 2017, 30 employees have each earned 2 weeks of vacation time. The employees’ average salary is $500 per week. Prepare Kasten’s December 31, 2017, adjusting entry.

(Equity Method) Parent Co. invested $1,000,000 in Sub Co. for 25% of its outstanding stock. Sub Co. pays out

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Instructions

Use the information in the following T-account for the investment in Sub to answer the following questions.

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