S&L Financial buys and sells securities which it classifies
as available-for-sale. On December 27, 2021, S&L purchased
Coca-Cola bonds at par for $879,000 and sold the bonds on January
3, 2022, for $885,000. At December 31, the bonds had a fair value
of $875,000, and S&L has the intent and ability to hold the
investment until fair value recovers.
Prepare journal entries to record (a) any unrealized gains or
losses occurring in 2021 and (b) the sale of the bonds in 2022,
including recognition of any unrealized gains in 2022 prior to sale
and reclassification of amounts out of OCI. (If no entry is
required for a transaction/event, select "No journal entry
required" in the first account field.)
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