9. On August 20, 2018, Macak, Co. decides to invest excess cash of $ 3 comma 000 by purchasing Buffalo, Inc. bonds. At year

Question

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9. On August 20, 2018, Macak, Co. decides to invest excess cash of $ 3 comma 000 by purchasing Buffalo, Inc. bonds. At year

-end, December 31, 2018, the market price of the bonds was $ 2 comma 400. The investment is categorized as available-for-sale debt. Journalize the adjusting entry needed at December 31, 2018.

Business

1 answer:

tia_tia [17] · Answer 1 · 2022-07-02T05:17:35+03:00

Answer: <em>Please refer to explanation. </em>

Explanation:

Since it is an Available for Sale debt, we journalize it as follows

2018

Dec. 31

DR Unrealized holding loss on AFS 600

CR .Fair value adjustment - AFSI 600

(To record available-for-sale investments at fair value)

Calculation,

= Cost Price - Market Price

=($3000 - $2400)

= $600

<em>If you need any clarification do comment or react.</em>

9. On August ​20, 2018​, Macak​, Co. decides to invest excess cash of $ 3 comma 000 by purchasing Buffalo​, Inc. bonds. At​ year

9. On August 20, 2018, Macak, Co. decides to invest excess cash of $ 3 comma 000 by purchasing Buffalo, Inc. bonds. At year