Valuing Available-for-Sale Securities at Fair Value On January 1, Valuation Allowance for Available-for-Sale Investments had a zero balance. On December 31, the cost of the available-for-sale securities was $207,000, and the fair value was $212,660 Prepare the adjusting entry to record the unrealized gain or loss on available-for-sale investments on December 31. Dec. 31 Valuation Allowance for Available-for-Sale Investments 5,600 | X Unrealized Gain (Loss) on Available-for-Sale Investments 5,600 | X

Question

Hi, I'm not sure which values to use because I assumed it would be the difference between the two values given for the journal entry but seems like that's not the case. How do I solve this?

Valuing Available-for-Sale Securities at Fair Value
On January 1, Valuation Allowance for Available-for-Sale Investments had a zero balance. On December 31, the cost of the available-for-sale securities was $207,000, and the fair value was $212,660
Prepare the adjusting entry to record the unrealized gain or loss on available-for-sale investments on December 31.
Dec. 31 Valuation Allowance for Available-for-Sale Investments
5,600 | X
Unrealized Gain (Loss) on Available-for-Sale Investments
5,600 | X

Image Transcription

Valuing Available-for-Sale Securities at Fair Value On January 1, Valuation Allowance for Available-for-Sale Investments had a zero balance. On December 31, the cost of the available-for-sale securities was $207,000, and the fair value was $212,660 Prepare the adjusting entry to record the unrealized gain or loss on available-for-sale investments on December 31. Dec. 31 Valuation Allowance for Available-for-Sale Investments 5,600 | X Unrealized Gain (Loss) on Available-for-Sale Investments 5,600 | X

Expert Answer

Want to see the step-by-step answer?

See Answer

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Answer
*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Related Accounting Q&A

Find answers to questions asked by student like you

Q: Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of...

A: As you have posted multiple sub-parts and have not mentioned which are to be answered, I am providin...

Q: Required information Problem 14-44 (LO 14-2) The following information applies to the questions disp...

A: Tax basis is the value of an asset that is used for computing gain or loss when the asset is sold. I...

Q: Sanford and Sons produces blue moons. Resin used to make the blue moons is purchased by the pound. S...

A:  Calculate the material per unit.

Q: Which of the following is not an advantage of the corporate form of business? a. limited liability b...

A: Corporate is a popular form of business for the large and small industry. These types of business re...

Q: They are going to start a manufacturing company and need help deciding what entity type to choose to...

A: The different types of business entities prevent in an economy are(a)    Sole Proprietorship(b)    P...

Q: The board of directors of Mesa Verde Tool Company set the profit goal for calendar year 2016 at $2,2...

A: In absorption costing, the cost of goods sold includes the fixed manufacturing costs. The fixed cost...

Q: Brief Exercise 15-11Indigo Inc. owns shares of Sweet Corporation stock. At December 31, 2017, the se...

A: Preparation of journal entries to record unrealized holding gain or loss as on September 21, 2018. W...

Q: The following selected data were taken from the financial statements of Vidahill inc

A: Click to see the answer

Q: The following information was drawn from the Year 1 accounting records of Ozark Merchandisers: Inve...

A: a. Compute the amount of net sales: