S&L Financial buys and sells securities which it classifiesas available-for-sale. On December 27, 2018, S&L purchasedCoca-Cola bonds at par for $875,000 and sold the bonds on January3, 2019, for $880,000. At December 31, the bonds had a fair valueof $873,000, and S&L has the intent and ability to hold theinvestment until fair value recovers.
Prepare journal entries to record (a) any unrealized gains orlosses occurring in 2018 and (b) the sale of the bonds in 2019,including recognition of any unrealized gains in 2019 prior to saleand reclassification of amounts out of OCI.
- Record the entry to adjust to fair value on the date ofsale.
Note: Enter debits before credits.
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| | Date | General Journal | Debit | Credit |
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| January 03, 2019 | | | | | | | | | | | | | | | | | | |
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- Record the entry to reverse the previous fair valueadjustment.
Note: Enter debits before credits.
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| | Date | General Journal | Debit | Credit |
|---|
| January 03, 2019 | | | | | | | | | | | | | | |
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- Record the entry for sale of investment in Coca Colabonds.
Note: Enter debits before credits.
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| | Date | General Journal | Debit | Credit |
|---|
| January 03, 2019 | | | | | | | | | | | | | | |
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