S&L Financial buys and sells securities which it classifies
as available-for-sale. On December 27, 2018, S&L purchased
Coca-Cola bonds at par for $894,000 and sold the bonds on January
3, 2019, for $901,500. At December 31, the bonds had a fair value
of $890,000, 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 2018 and (b) the sale of the bonds in 2019,
including recognition of any unrealized gains in 2019 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.)
1)Record the entry for Fair value adjustment of December 31,
2018.
2)Record the entry to adjust to fair value on the date of sale. (Jan.3,2019)
3)Record the entry to reverse the previous fair value adjustment. (Jan, 3, 2019)
4)Record the entry for sale of Investment in Coca Cola bonds.(Jan, 3, 2019)
Get Answers For Free
Most questions answered within 1 hours.