On December 31, 2017, Reggit Company held the following short-term investments i

Question

On December 31, 2017, Reggit Company held the following short-term investments in its portfolio of available-for-sale securities. Reggit had no short-term investments in its prior accounting periods.

Prepare the December 31, 2017, adjusting entry to report these investments at fair value.

Fair Value Adjustment Journal General Computation of fair value adjustment. Fair Value Adjustment Computation - Available for Sale Portfolio Cost Fair ValueUnrealized Verrizano Corporation bonds payable Preble Corporation notes payable Lucerne Company common stock Total $ 66,500 S 61,900 46,400 85,100 $ 208,400 $ 193,400 54,000 87,900 Fair Value Adjustment General Journal>

Explanation / Answer

Cost Fair value UnrealizedAmount Verrizano Corporation bonds payable 66500 61900 Preble Corporation notes payable 54000 46400 Lucerne Company common stock 87900 85100 Total 208400 193400 -15000 Loss Unadjusted Balance in the Fair Value Adjustment account 0 Fair Value Adjustment Required -15000 Loss Unrealized loss—Equity 15000            Fair value adjustment—Available­for­sale (ST) 15000

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