Question

Available-For-Sale Debt Investment Impairment On January 1, 2020, Argonaut Industries pays $100,000 par value for debt securities issued by Bally Corporation, and designates them as AFS securi‐ ties. Following is valuation information on these securities for December 31, 2020 and 2021. Argonaut does not expect to sell the securities before recovery of losses at the end of either year.

P1.2 LO 1 Available-For-Sale Debt Investment Impairment On January 1, 2020, Argonaut Industries pays $100,000 par value for d

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Answer #1

Journal Entries for change in Fair Value on reporting dates

Available for Sale Securities are recorded at Fair Value and Changes in Fair Value are recorded in Unrealized Gain/Loss -OCI.

December 31, 2020 -   Dr. Unrealized Loss - OCI                  $20,000

                                 Cr.   Available for Sale Debt Securities $20,000

[Being AFS Debt Securities recorded at Fair Value on reporting date]

Presentation

Statement of Comprehensive Income For the period ending December 31, 2020 Amount ($) Particulars Unrealized Gain-OCI -20000 C

December 31, 2021 -   Dr. Available for Sale Debt Securities $3,000

                                 Cr. Unrealized Gain - OCI                   $3,000

[Being AFS Debt Securities recorded at Fair Value on reporting date]

Presentation

Statement of Comprehensive Income For the period ending December 31, 2021 Amount ($) Particulars Unrealized Gain-OCI 3000 Com

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