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Problem IV: (9 points) On 8/1/2020, Gorman Corp. had the following account balances available for a bond being accounted for as an available-for-sale security
Problem IV: (9 points) On 8/1/2020, Gorman Corp. had the following account balances available for a bond being accounted for as an available-for-sale security before its subsequent sale: Investment in Available-for Sale Security Less: Allowance for Change in Fair Value Net Carrying Value 8/1/2020 $700,000 30,000 (credit balance) $670,000 On 8/1/2020, Gorman sold all these bonds for $650,000 in cash. Assume all interest has already been recorded up to the date of sale. Required: In the journal below, prepare the journal entries Gorman should make in 2020 related to this bond sale and the related fair market adjustment on either the date of sale or year-end. Do not include closing entries. Special Note: Remember to use the words "realized" or "unrealized" when describing gains and losses. Date 8/1/2020 Debit Credit 8/1/2020 or 12/31/2020
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