Question
Keto Snacks, Inc. reported an investment in a bond issued by Paleo Production, Inc. as an available-for-sale security in 2020. The Investment had an amortized
Keto Snacks, Inc. reported an investment in a bond issued by Paleo Production, Inc. as an available-for-sale security in 2020. The Investment had an amortized cost of $45,000 at December 31, 2020.Keto properly adjusted the books to reflect the $47,000 fair value of the bond at year-end.On January 1, 2021, the company decided to change the classification of the investment to a trading security.
Which of the following would be included in the entry to record the transfer?
Group of answer choices
A) Debit to Unrealized gain on investment (OCI) - $2,000
B) Credit to Fair Value Adjustment - $2,000
C) Debit to Investment in TS - Paleo Bond - $45,000
D) A and B
E) B and C
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started