On February 15, Jewel Company buys bonds of Marcelo Corp. for $201,700. 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 $203,700. The entry to record the year-end adjustment is: Debit Fair Value Adjustment-Available-for-Sale $2,000; credit Unrealized Gain-Equity $2,00.Debit Fair Value Adjustment-Available-for-Sale $2,000; credit Interest Revenue $2,000.Debit Fair Value Adjustment-Available-for-Sale $2,000; credit Realized Gain-Income $2,000.Debit Cash $2,000; credit Gain on Sale of Investments $2,000.Debit Cash $2,000; credit Dividend Revenue $2,000.

At the time of reporting period, the gain or loss on holding the bond should be accounted. If the value of security declines, the investment must be "written down" to reflect the change in the fair market value of the security. This is accounted by crediting the security account and debiting the loss account. Similarly, if the value of security goes up, then 'available for security' is debited and 'unrealised gain' is credited.On December 31, the bonds had a fair value of $203,700. Hence, value of security goes up by $2000. The entry to record the year-end adjustment is: Answer: Debit Fair Value Adjustment- Available for sale $2000; Credit Unrealised gain-equity $2000Debit fair value adjustment- Available for sale $2000; credit interest revenue $2000 This is not revenue income. And it's not realised. Hence, this entry is not correct Debit fair Value Adjustment- Available for sale $2000; Credit Realised gain-Income $2000 This increase in gain is not realised. Hence it's not correct to credit the realised gain income Debit cash $2000; Credit Gain on sale of investment $2000 Cash is not received. And sale of investment is not happened. Therefore, we couldn't credit the gain on sale of investment. And cash account can't be debited. Debit cash $2000; credit Dividend Revenue $2000 We didn't realise cash, hence cash account can't be debited. Similarly increase in fair value of bond is not a dividend revenue