Prepare the adjusting entry to record the bonds

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Question - Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale.

 

12/31/20

12/31/21

12/31/22

Amortized cost

$194,100

$197,900

$200,900

Fair value

$197,510

$196,580

$200,900

Required -

(a) Prepare the adjusting entry to record the bonds at fair value at December 31, 2020. The Fair Value Adjustment account has a debit balance of $1,950 prior to adjustment.

(b) Prepare the adjusting entry to record the bonds at fair value at December 31, 2021.

Reference no: EM133003237

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