Data for debt investments are presented in EH.6 . Assume instead that the investments are classified as

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Data for debt investments are presented in EH.6. Assume instead that the investments are classified as available-for-sale debt securities with the same cost and fair value data as indicated in EH.6. The securities are considered to be a long-term investment.


Instructions
a. Prepare the adjusting entry at December 31, 2022, to report the securities at fair value.
b. Show the statement presentation at December 31, 2022, after adjustment to fair value.
c. Pam Jenks, a member of the board of directors, does not understand the reporting of the unrealized gains or losses on trading debt securities and available-for-sale debt securities. Write a letter to Ms. Jenks explaining the reporting and the purposes it serves.


EH.6

Security Cost Fair Value $18,100 $16,000 14,800 A B 12,500 23,000 18,000 Total $53,600 $48,800

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Accounting Tools For Business Decision Making

ISBN: 9781119571056

7th Edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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