S&L Financial buys and sells securities which it classifies as available-for-sale. Assume that on December 27, 2024, S&L purchased Coca-Cola bonds at par for $883,000 and sold the bonds on January 3, 2025, for $890,000. At December 31, the bonds had a fair value of $877,000, and S&L has the intent and ability to hold the investment until fair value recovers. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2024 and (b) the sale of the bonds in 2025, including recognition of any unrealized gains in 2025 prior to sale and reclassification of amounts out of OCI. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No 1 2 3 4 Answer is not complete. Date General Journal December 31, 202 Loss on investments (unrealized, OCI) Fair value adjustment January 03, 2025 Fair value adjustment Gain on investments (unrealized, OCI) January 03, 2025 Fair value adjustment Loss on investments (unrealized, OCI) January 03, 2025 Cash Gain on investments (NI) Investment in bonds Gain on investments (unrealized, OCI) > XX *33 Debit 6,000 7,000 X 6,000 X 890,000 7,000 Credit 6,000 7,000 6,000 883,000 7,000

S&L Financial buys and sells securities which it classifies as available-for-sale. Assume that on December 27, 2024, S&L purchased Coca-Cola bonds at par for $883,000 and sold the bonds on January 3, 2025, for $890,000. At December 31, the bonds had a fair value of $877,000, and S&L has the intent and ability to hold the investment until fair value recovers. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2024 and (b) the sale of the bonds in 2025, including recognition of any unrealized gains in 2025 prior to sale and reclassification of amounts out of OCI. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No 1 2 3 4 Answer is not complete. Date General Journal December 31, 202 Loss on investments (unrealized, OCI) Fair value adjustment January 03, 2025 Fair value adjustment Gain on investments (unrealized, OCI) January 03, 2025 Fair value adjustment Loss on investments (unrealized, OCI) January 03, 2025 Cash Gain on investments (NI) Investment in bonds Gain on investments (unrealized, OCI) > XX *33 Debit 6,000 7,000 X 6,000 X 890,000 7,000 Credit 6,000 7,000 6,000 883,000 7,000

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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