Please help me with where I have question marks. S&L Financial buys and sells se

Question

Please help me with where I have question marks.

S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $886,000 and sold the bonds on January 3, 2019, for $892,500. At December 31, the bonds had a fair value of $882,000.

Prepare journal entries to record (a) any unrealized gains or losses occurring in 2018 and (b) the sale of the bonds in 2019. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer is complete but not entirely correct.

No Date General Journal Debit Credit 1 December 31, 2018 Unrealized holding loss—NI 4,000 1 Fair value adjustment 4,000 2 January 03, 2019 Fair value adjustment    ???? ? 2 Unrealized holding gain—NI ????? 3 January 03, 2019 Cash 892,500 3 Investment in Coca-Cola bonds 886,000 3 ????????????????????? 6,500

Explanation / Answer

Answer in s.no. 2 row 4 th debit coloumn is 2,500. Answer in s.no.2 row 4th credit oloumn is 2,500 because every debit is equal to credit amount so that both are same. And s.no.3 answer journal wise that is fair value adjustment.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.