InformationOn its December 31, 2024 balance sheet, Pharoah Company appropriately reported a$10,000 debit balance in its Fair Value Adjustment account. There was no change during2025 in the composition of Pharoah's portfolio of debt investments held as available-for-sale debt securities. The following information pertains to that portfolio:SecurityDate11/1/2026XYNZCostInstructionsRecord the year-end entry to adjust the debt investments to fair value.Account$138,000108000191000$437,000DebitFair value at12/31/25$172,00096000141000$409,000Credit

The adjustment in the available for sale securities be it a debt or an equity requires to determine…

Answered: Record the year-end entry to adjust the…

Business

Accounting

Record the year-end entry to adjust the debt investments to fair value.

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

Information
On its December 31, 2024 balance sheet, Pharoah Company appropriately reported a
$10,000 debit balance in its Fair Value Adjustment account. There was no change during
2025 in the composition of Pharoah's portfolio of debt investments held as available-for-
sale debt securities. The following information pertains to that portfolio:
Security
Date
11/1/2026
XYN
Z
Cost
Instructions
Record the year-end entry to adjust the debt investments to fair value.
Account
$138,000
108000
191000
$437,000
Debit
Fair value at
12/31/25
$172,000
96000
141000
$409,000
Credit

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