Question

-MUTEVORK Saved Help Save & Exit Submit Check my work The following information shows Carperk Company's individual investments in securities during its current year, along with the December 31 fair values. 02:27:52 a. Investment in Brava Company bonds: $353,950 cost; $384.744 fair value. Carperk intends to hold these bonds until they mature in 5 years b. Investment in Baybridge common stock: 29,500 shares: $281,390 cost $305,871 fair value. Carperk owns 32% of Baybridge's voting stock and has a significant influence over Baybridge. c. Investment in Duffa bonds: $145,120 cost: $156,439 fair value. This investment is not readily marketable and is not classified as held- to-maturity or trading. d. Investment in Newton notes: $80,701 cost: $79,329 fair value. Newton notes are not readily marketable and are not classified as held-to-maturity or trading. e. Investment in Farmers common stock: 16,300 shares; $88,488 cost: $93,974 fair value. This stock is marketable, and Carperk intends to sell it within the year. This stock investment results in Carperk having an insignificant influence over Farmers. Book int ences Required: 1. Identify whether each investment should be classified as a short-term or long-term investment. For each investment, indicate in which of the six investment classifications it should be placed 2. Prepare a journal entry dated December 31 to record the fair value adjustment for the portfolio of available-for-sale debt securities. Carperk had no available-for-sale debt securities prior to this year. Complete this question by entering your answers in the tabs below. < Prev 4 of 4 * Next >

need the 2nd requirement not the 1st..the journal entry

Answer 1

2.

Date	General Journal	Debit	Credit
Dec. 31	Fair value adjustment (AFSI)	9947
	Unrealized holding gain or loss-Equity		9947
	(To record AFS investments at fair value)

Working:

Investment	Cost $	Fair Value $	Adjustment $
c. Duffa bonds	145120	156439	11319
d. Newton notes	80701	79329	-1372
Total $	225821	235768	9947