Question

Fair Value Journal Entre Available for sale investments The investments of Steelers the include single mestment 11.000 theres of Bengals the common stock purchaund on September 17, rear for 350 persone cluding brokerage common These shares were d ied as v etor sales As of the December 31, Year 1, balance sheet dat w e declined to share 2. Journalise the entries to acquire the investment on September 12 and record the adjustment to far value on December 31 Year 1. Year 1 Sept 12 How is the ne Unrealed Gain (L ed on or loss for available for sale investments disclosed on the financial statements ) on Available for Sale Investments is reported in the the

Answer 1

Solution a:

Journal Entries
Date	Particulars	Debit	Credit
Year 1, Sep 12	Equity Investment - Available for sale Dr	$119,000.00
	To Cash		$119,000.00
	(To record investment in shares)
Year 1, Dec 31	Unrealized holding gain or loss - OCI Dr	$23,800.00
	To Fair value adjustment		$23,800.00
	(To record adjustment to fair value)

Solution b:

Unrealized gain (Loss) on available for sale investment is reported in the other comprehensive income of the statement of comprehensive income.