Carpark Services began operations in 20X1 and maintains long-term investments in available-for-sale debt securities. The year-end cost and fair values for its portfolio of these debt securities follows. The year-end adjusting entry to record the unrealized gain/loss at December 31, 20X1 is: Available-for-Sale SecuritiesCost Fair ValueDecember 31, 20X1$250,000 $241,000December 31, 20X2$340,000 $350,000
A. Debit Fair Value Adjustment - Available-for-Sale (LT) $9,000; Credit Unrealized Loss - Equity $9,000.
B. Debit Unrealized Loss - Equity $9,000; Credit Fair Value Adjustment - Available-for-Sale (LT) $9,000.
C. Debit Fair Value Adjustment - Available-for-Sale (LT) $9,000; Credit Unrealized Gain - Equity $9,000.
D. Debit Realized Loss - Income $9,000; Credit Fair Value Adjustment - Available-for-Sale (ST) $9,000.
E. Debit Unrealized Gain - Equity $9,000; Credit Fair Value Adjustment - Available-for-Sale (LT) $9,000.
Answer: B
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