Securities available-for-sale; adjusting entries
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E 12-10 Securities available-for-sale; adjusting entries
The accounting records of Jamaican Importers Inc. at January 1, 2011, included the following:
Assets:
Investment in IBM common shares $1,345,000
Less: Fair value adjustment (145,000)
___________
$1,200,000
Shareholder's Equity:
Accumulated unrealized holding gains and losses 145,000
No changes occurred during 2011 in the investment portfolio.
Required:
Prepare appropriate adjusting entry(s) at December 31, 2011, assuming the fair value of the IBM common shares was:
1.$1,175,000
2.$1,275,000
3.$1,375,000
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Solution Summary
The solution provides adjusting entries for Securities available-for-sale.
Solution Preview
1 - Debit Accumulated unrealized holding gains and losses - 25,000 (1200000 - 1175000)
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