Question

Bethea Financial Services had a debit balance of $32,217 in their Fair Value Adjustment account on December 31, 2020. Based on the valuation of their equity securities on December 31, 2021, they should have a net unrealized gain of $46,398. Based on this, they should ________ Fair Value Adjustment for ________.

Answer 1

Answer:

Debit

$14,181

Explanation:

Given:

Fair Value Adjustment account = $32,217 (Debit)

Net unrealized gain = $46,398 (Credit)

According to Fair Value Adjustment account , Debit balance is lower than Credit balance, So they should Debit (Fair Value Adjustment account)

Debit amount = Net unrealized gain - Fair Value Adjustment account

Debit amount = $46,398 - $32,217

Debit amount = $14,181