Question
During 20X1, Marten purchased $100,000 face amount bonds at a premium and classifies them as available-for-sale investment. On 12/31/20X1 after recognizing interest income and amortization,
During 20X1, Marten purchased $100,000 face amount bonds at a premium and classifies them as available-for-sale investment. On 12/31/20X1 after recognizing interest income and amortization, the carrying value of the bonds is $101,300 and the market value is $101,900. What additional journal entry related to the bond investment should Marten make on 12/31/20X1?
Multiple Choice
Fair value adjustment—Available-for-Sale Securities 600 OCI--Unrealized Gain or Loss in Fair Value of Available-for-Sale Securities 600 Fair value adjustment—Available-for-Sale Securities 600 Gain on Available-for-Sale Securities 600 Fair value adjustment—Available-for-Sale Securities 1,900 Gain on Available-for-Sale Securities 1,900 Fair value adjustment—Available-for-Sale Securities 1,900 OCI--Unrealized Gain or loss in Fair value of Available-for-Sale 1,900
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Intermediate Accounting principles and analysis
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
2nd Edition
471737933, 978-0471737933
