On 8/1/19, Fairfield Corp. had the following account balances available for a bond being accounted for...
On 8/1/19, Fairfield Corp. had the following account balances available for a bond being accounted for as an available-for-sale security before its subsequent sale:
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8/1/19 |
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Investment in Available-for Sale Security |
$900,000 |
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Allowance for Change in Fair Value |
30,000 |
(credit) |
|
Net carrying value |
$870,000 |
On 8/1/19, Fairfield sold all these bonds for $865,000. Assume all interest has already been recorded up to the date of sale.
Required: In the journal below, prepare the journal entries Fairfield should make in 2019 related to this bond sale as well as the related fair market adjustment on either the date of sale or year-end. Do not include closing entries.
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Date |
Debit |
Credit |
|
|
8/1/19 |
|
||
|
8/1/19 or 12/31/19 |
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Homework Answers
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