Security Cost Fair Value Prepare the adjusting entry at December 31, 2017, to re

Question

Security

Cost

Fair Value

Prepare the adjusting entry at December 31, 2017, to report the securities at fair value. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Show the statement presentation at December 31, 2017, after adjustment to fair value. (Enter account name only and do not provide descriptive information.)

Storrer, Inc.

At December 31, 2017, the available-for-sale securities for Storrer, Inc. are as follows. They have the same cost and fair value. The securities are considered to be a long-term investment.

Security

Cost

Fair Value

A $17,500 $16,200 B 12,800 14,500 C 23,000 18,800 $53,300 $49,500

Explanation / Answer

Answer

1.

The adjusting entry at December 31, 2017

2.

The statement presentation at December 31, 2017

In Balance Sheet:

In Income Statement

Date Particulars Dr Cr December 31 Unrealized loss-income $3800 Fair value Adjustment-Trading(53300-49500) $3800 (Being record adjusting entry)

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