Exercise C-10 Multiyear fair value adjustments to available-for-sale securities

Question

Exercise C-10 Multiyear fair value adjustments to available-for-sale securities LO P3 Ticker Services began operations in 2013 and maintains long-term investments in available-for-sale securities. The year-end cost and fair values for its portfolio of these investments follow December 31, 2013 December 31, 2014 December 31, 2015 December 31, 2016 Cost Fair Value $320,600 $310,982 365,484 387,413 497,058 588,020 750,558 667,997 Prepare journal entries to record each year-end fair value adjustment for these securities. (If no entry is required select No journal entry required in the first entry field. 12/31/13 Existing balance in Fair Value Adjustment-AFS (LT) Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Value Adjustment-AFS (LT) 12/31/14 Existing balance in Fair Value Adjustment-AFS LT Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Valuo Adjustment-AFS (LT Esisting blanc n Far (LT Existing balance in Fair Value Adjustment-AFS (LT) Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Value Adjustment-AFS (LT) 1231/15 12/31/16 Existing balance in Fair Value Adjustment-AFS (LT) Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Value Adjustment-AFS (LT)

Explanation / Answer

Note : Adjustment difference between cost and fair value will be transferred to Profit and lOss A/c.

Journal Entries :

1) As on 31-12-13

Profit & loss a/c . Dr. 9618

To Investments a/c. 9618

( 320600- 310982)

2) As on 31-12-14

Investments a/c. Dr. 21929

To Profit & loss a/c. 21929

( 387413 - 365484)

3) As on 31-12-15

Investments. A/c. Dr. 90962

To profit & loss. A/c. 90962

(588020 - 497058)

4). As on 31-12-16

Profit & loss a/c. Dr. 82561

To investments a/c. 82561   

( 750558 - 667997)

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.