Chapter 8, Problem 18.6EP

At the date of the creation of the investment pool, each of the participants should

1. a.      Debit its Fund Balance account and credit its Investments account for the prior fair value of the assets transferred to the pool.
2. b.      Debit or credit its Investments account as needed to adjust its carrying value to current fair value. The offsetting entry in each fund should be to Fund Balance.
3. c.       Debit Equity in Pooled Investments for the current fair value of investments pooled, credit Investments for the prior fair value of investments pooled, and credit or debit Revenues—Change in Fair Value of Investments for the difference.
4. d.      Make a memorandum entry only.