7. EX.15-20.ALGO (Algorithmic) Fair Value Journal Entries, Available-for-Sale In
ID: 2520052 • Letter: 7
Question
7. EX.15-20.ALGO (Algorithmic) Fair Value Journal Entries, Available-for-Sale Investments The investments of Steelers Inc. include a single investment: 9,700 shares of Bengals Inc. common stock rchased on September 12, Year 1, for $10 per share including brokerage com purc classifled as available-for-sale securities. As of the December 31, Year 1, balance sheet date, the share price declined to $7 per share. a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December 31, Year 1. Year 1 Sept. 12 Page 7 of 7 Year 1 Dec. 31 b. How is the unrealized gain or loss for available-for-sale investments disclosed on the financial statements? is reported in the of theExplanation / Answer
Year 1, Sept 12
Investment inBengals Inc- Available for Sale 97000
To Bank Account 97000
Year 1, December 31
Loss on Available for Sale Investment in Bengals Inc 29100
To Investment in bengala Inc- Available for Sale 29100
(Loss to be recorded in Other Comprehencive Income)
(b)Unrealised gain(Loss) on available for sale investments is recorded in the OTHER COMPREHENSIVE INCOME of the stockholder's equity