Fair value: Fair value is a selling price which is agreed by the buyer and seller. A probable estimate market price of good, service or asset based on the market situation is termed as fair value. Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain. An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss. (a) To prepare: To prepare the year-end adjusting entry .

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Chapter 17, Problem 11Q

To determine

Fair value: Fair value is a selling price which is agreed by the buyer and seller. A probable estimate market price of good, service or asset based on the market situation is termed as fair value.

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

(a) To prepare: To prepare the year-end adjusting entry.

To determine

(b) To Prepare: To prepare the adjusting entry at the end of the year.

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