Adjusting AFS Debt Securities to Fair Value A portfolio of investments of available-for-sale securities held by Dow Inc. is as follows. Dec. 31, 2020 Cost Fair Value Eastern Corp. bonds $240,000 $256,000 Western Corp. bonds 400,000 410,000 Total $640,000 $666,000 Fair Value $280,000 Dec. 31, 2021 Cost Eastern Corp. bonds $240,000 Western Corp. bonds 400,000 Total $640,000 380,000 $660,000 The Fair Value Adjustment account had a $0 balance on January 1, 2020. No sales or purchases took place in the available-for-sale investment portfolio in 2020 and 2021. a. Record the adjusting entry on December 31, 2020, to adjust the debt investments to fair value. Date Account Name Dr. Cr. Dec 31, 2020 Fair Value Adjustment--AFS 26000 0 Unrealized Gain or Loss--OCI 0 26000 b. Record the adjusting entry on December 31, 2021, to adjust the debt investments to fair value. Date Account Name Dr. Cr. Dec. 31, 2021 Unrealized Gain or Loss--OCI 6000 0 Fair Value Adjustment--AFS 0 6000 C. Indicate how the adjustment to fair value in (b) would be reflected in Dow's income statement for the year ended December 31, 2021. Note: Indicate a loss with a negative sign. Income Statement 2021 Net gain (loss) on investment $ -6000 x Adjusting AFS Debt Securities to Fair Value A portfolio of investments of available-for-sale securities held by Dow Inc. is as follows. Dec. 31, 2020 Cost Fair Value Eastern Corp. bonds $240,000 $256,000 Western Corp. bonds 400,000 410,000 Total $640,000 $666,000 Fair Value $280,000 Dec. 31, 2021 Cost Eastern Corp. bonds $240,000 Western Corp. bonds 400,000 Total $640,000 380,000 $660,000 The Fair Value Adjustment account had a $0 balance on January 1, 2020. No sales or purchases took place in the available-for-sale investment portfolio in 2020 and 2021. a. Record the adjusting entry on December 31, 2020, to adjust the debt investments to fair value. Date Account Name Dr. Cr. Dec 31, 2020 Fair Value Adjustment--AFS 26000 0 Unrealized Gain or Loss--OCI 0 26000 b. Record the adjusting entry on December 31, 2021, to adjust the debt investments to fair value. Date Account Name Dr. Cr. Dec. 31, 2021 Unrealized Gain or Loss--OCI 6000 0 Fair Value Adjustment--AFS 0 6000 C. Indicate how the adjustment to fair value in (b) would be reflected in Dow's income statement for the year ended December 31, 2021. Note: Indicate a loss with a negative sign. Income Statement 2021 Net gain (loss) on investment $ -6000 x