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BE 12-7 Available-for-sale securities LO12-4 For several years Fister Links Products has held Microsoft bonds, considered by the company to be securities available-for-sale. The bonds
BE 12-7
Available-for-sale securities LO12-4
- For several years Fister Links Products has held Microsoft bonds, considered by the company to be securities available-for-sale.
- The bonds were acquired at a cost of $500,000 at the beginning of 2018.
- At the end of 2018, their fair value was $610,000 and their amortized cost was $510,000.
- At the end of 2019, their fair value was $600,000 and their amortized cost was $520,000.
a. At what amount will the investment be reported in the December 31, 2019, balance sheet?
b. What is the adjusting entry for 2018 (ignore interest) -
c. What is the adjusting entry on 2019 (ignore interest) -
d. (optional) What is wrong with the amortized cost in this problem?
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