Question

12 HW 5 Exercise 12-13 Classification of securities; adjusting entries [LO12-4] On February 18, 2018, Union Corporation purchased $2,184,000 of IBM bonds. Union will hold the bonds indefinitely, and may sell them if their price increases sufficlently. On December 31, 2018, and December 31, 2019, the market value of the bonds was $2128,000 and $2,212,000, respectively. 2. & 3. Prepare the adjusting entry for December 31, 2018 and 2019. (If no entry is required for a transactlon/event, select "No Journal entry required" in the first account field.) Hint Print Journal entry worksheet Record the adjusting entry for December 31, 2018. r 31,2018 くPrey ill Next 5 of 10

Answer 1

Answer
Date	explanation	debit	credit
dec 31 2018	Net unrealized holding gains and losses—OCI	$ 56,000
	fair value adjustment		$ 56,000
	To record fall in value
dec 31 2019	fair value adjustment	$ 84,000
	Net unrealized holding gains and losses—OCI		$ 84,000
	To record increase in value
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