Question
Asked Jan 10, 2020
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(a) Assuming no Fair Value Adjustment account balance
at the beginning of the year, prepare the adjusting entry
at the end of the year if Laura Company’s available-forsale
debt securities have a fair value $60,000 below cost.
(b) Assume the same information as part (a), except that
Laura Company has a debit balance in its Fair Value
Adjustment account of $10,000 at the beginning of the
year. Prepare the adjusting entry at year-end.

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