Homework Answers
Requirement 1:
| Reporting category for the investment | Available for Sale |
Requirement 2:
| Date | General Journal | Debit | Credit |
| Dec. 31, 2020 | Fair value adjustment [500 x $20] | $ 10,000 | |
| Unrealized holding gain | $ 10,000 | ||
| [To record adjustment of unrealized holding gain] | |||
| Dec. 31, 2021 | Fair value adjustment [500 x $10] | $ 5,000 | |
| Unrealized holding gain | $ 5,000 | ||
| [To record adjustment of unrealized holding gain] |
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