For several years Fister Links Products has held Microsoft bonds, considered by
ID: 2575050 • Letter: F
Question
For several years Fister Links Products has held Microsoft bonds, considered by the company to be securities available-for-sale. The bonds were acquired at a cost of $600,000. At the end of 2018, their fair value was $730,000 and their amortized cost was $610,000. At the end of 2019, their fair value was $725,000 and their amortized cost was $620,000.
At what amount will the investment be reported in the December 31, 2019, balance sheet? What adjusting entry is required to accomplish this objective (ignore interest)?
Answer is complete but not entirely correct.
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Balance Sheet
General Journal
What adjusting entry is required to accomplish this objective (ignore interest)? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
No Date General Journal Debit Credit 1 December 31, 2019 Unrealized holding loss—OCI 1 Fair value adjustmentExplanation / Answer
At what amount will the investment be reported in the December 31, 2019, balance sheet? What adjusting entry is required to accomplish this objective (ignore interest)?
Investment will be reported at $725000
What adjusting entry is required to accomplish this objective (ignore interest)? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
No Date General journal debit credit 1 dec 31,2019 Unrealized holding Loss-OCI 5000 Available for sale-debt securities 5000