On its December 31, 2017 balance sheet, Free Company appropriately reported a $10,000 debit balance in...
On its December 31, 2017 balance sheet, Free Company appropriately reported a $10,000 debit balance in its Fair Value Adjustment (available-for-sale) account. There was no change during 2018 in the composition of Free’s portfolio of debt investments held as available-for-sale securities. The following information pertains to that portfolio: Security Cost Fair value at 12/31/18 X $125,000 $160,000 Y 100,000 85,000 Z 175,000 125,000 $400,000 $370,000 What is the balance of the AOCI account due to debt investments in Stockholder's Equity at 12/3/12018?
Select one: a. $30,000 credit b. $10,000 credit c. $0 d. $40,000 credit e. $10,000 debit f. $30,000 debit g. $40,000 debit
Homework Answers
| Date | Accounts | Debit | Credit |
| 31-Dec-18 | Fair value adjustment a/c Dr (40000-370000) | $30,000.00 | |
| To Available for sale securities a/c Cr | $30,000.00 |
Balance of the AOCI account due to debt investments in Stockholder's Equity at 12/3/12018 = $30000 + 10000 = $40000 Debit
Option g. $40,000 debit is correct answer.
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