Answered: Prepare the journal entry for the 2021…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

At December 31, 2020, the available-for-sale debt portfolio for Kingbird, Inc. is as follows.

Security	Cost	Fair Value	Unrealized Gain (Loss)
A	$32,375	$27,750	$(4,625	)
B	23,125	25,900	2,775
C	42,550	47,175	4,625
Total	$98,050	$100,825	2,775
Previous fair value adjustment balance—Dr.	740
Fair value adjustment—Dr.	$2,035

On January 20, 2021, Kingbird, Inc. sold security A for $27,935. The sale proceeds are net of brokerage fees.

Prepare the journal entry for the 2021 sale of security A. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 20, 2021

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