On February 15, Jewel Company buys bonds of Marcelo Corporation for $200,500. The investment is classified as available-for-sale securities. This is the company’s first and only investment in available-for-sale securities. On December 31, the bonds had a fair value of $201,300. The entry to record the year-end adjustment is:

Question

Accepted Answer

Debit Fair Value Adjustment—Available-for-Sale $800; credit Unrealized Gain—Equity $800.

Answer

Debit Cash $800; credit Dividend Revenue $800.

Answer

Debit Fair Value Adjustment—Available-for-Sale $800; credit Interest Revenue $800.

Answer

Debit Fair Value Adjustment—Available-for-Sale $800; credit Realized Gain—Income $800.

Answer

Debit Cash $800; credit Gain on Sale of Investments $800.

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On February 15, Jewel Company buys bonds of Marcelo Corporation for $200,500. Th...

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