Exercise 17-9

At December 31, 2017, the available-for-sale debt portfolio for Wildhorse, Inc. is as follows.

Security		Cost		Fair Value		Unrealized Gain (Loss)
A		$18,375		$15,750		$(2,625	)
B		13,125		14,700		1,575
C		24,150		26,775		2,625
Total		$55,650		$57,225		1,575
Previous fair value adjustment balanceDr.						420
Fair value adjustmentDr.						$1,155

On January 20, 2018, Wildhorse, Inc. sold security A for $15,855. The sale proceeds are net of brokerage fees.

PART A:

Prepare the adjusting entry at December 31, 2017, to report the portfolio at fair value. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

PART B:

Show the balance sheet presentation of the investment-related accounts at December 31, 2017. (Do not leave any answer field blank. Enter 0 for amounts.)

WILDHORSE, INC Balance Sheet

PART C:

Prepare the journal entry for the 2018 sale of security A. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

WILDHORSE, INC Balance Sheet December 31, 2017 Current Assets 57225 Stockholders' Equity Common Stock Additional Paid-in Capital Add Accumulated other Comprehensive Income 1575 Total Stockholders' Equity