Novi purchased ABC bonds on 1/1/22. Data regarding these available-for-sale securities follow: Cost MV December 31, 2022 $150,000 $130,000 December 31, 2023 150,000 161,000 December 31, 2024 150,000 155,000 On 1/1/25, Novi sold $40,000 (cost) of the securities for $40,100. Market Value of the remaining securities at 12/31/25 was $108,000. The balance of the Fair Value Adjustment account included on the 12/31/25 balance sheet is: a.$2,000 debit b.$2,000 credit c.$2,100 debit d.$1,900 credit e.$1,900 debit
Novi purchased ABC bonds on 1/1/22. Data regarding these available-for-sale securities follow: Cost MV December 31, 2022 $150,000 $130,000 December 31, 2023 150,000 161,000 December 31, 2024 150,000 155,000 On 1/1/25, Novi sold $40,000 (cost) of the securities for $40,100. Market Value of the remaining securities at 12/31/25 was $108,000. The balance of the Fair Value Adjustment account included on the 12/31/25 balance sheet is: a.$2,000 debit b.$2,000 credit c.$2,100 debit d.$1,900 credit e.$1,900 debit
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter15: Investments And Fair Value Accounting
Section: Chapter Questions
Problem 28E
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Novi purchased ABC bonds on 1/1/22. Data regarding these available-for-sale securities follow:
|
Cost |
MV |
December 31, 2022 |
$150,000 |
$130,000 |
December 31, 2023 |
150,000 |
161,000 |
December 31, 2024 |
150,000 |
155,000 |
On 1/1/25, Novi sold $40,000 (cost) of the securities for $40,100. Market Value of the remaining securities at 12/31/25 was $108,000.
The balance of the Fair Value Adjustment account included on the 12/31/25
a.$2,000 debit
b.$2,000 credit
c.$2,100 debit
d.$1,900 credit
e.$1,900 debit
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