Question

Golden Financial buys and sells securities which it classifies as available-for-sale. On December 31, 2020, a bond had an amortized cost of $96,000 and fair value of $97,000 Differences between cost and market values we considered to be remporary. The change in market value was properly accounted for at December 31, 2020, On December 31, 2021, the bond has an amortired con of 396.000 and the bonds fout value w now 892.000 The amount included in 2021 other comprehensive income as a result of this investment would be Do not od dolor sit do not odd comme by yourself to your mount round the one to the whole numbers the amount is negative

Answer 1

Amount included in 2021 other comprehensive income -5000

Explanation:

The available for sale securities will be valued at fair market value at the end of the accounting period. The losses and gains will be included as part of other comprehensive income

December 31, 2020 – Fair market value – Carrying value = $97,000- $96,000 = $1,000 Gain recognised in other comprehensive income

December 31, 2021- Fair market value – Carrying value = $92,000- $97,000 = -$5,000 Loss