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 investments follow. The year-end adjusting entry to record the unrealized gain/loss at December 31, 20X1 is: Available-for-Sale Debt SecuritiesCost Fair ValueDecember 31, 20X1$245,000? $234,100?December 31, 20X2$355,000? $352,500?December 31, 20X3$400,000? $404,200?
A. Debit Unrealized Gain- Equity $10,900; Credit Fair Value Adjustment - Available-for-Sale (LT) $234,100.
B. Debit Fair Value Adjustment - Available-for-Sale (LT) $10,900; Credit Unrealized Loss - Equity $10,900.
C. Debit Fair Value Adjustment - Available-for-Sale (LT) $10,900; Credit Unrealized Gain - Equity $10,900.
D. Debit Unrealized Loss - Income $10,900; Credit Fair Value Adjustment - Available-for-Sale (ST) $10,900.
E. Debit Unrealized Loss - Equity $10,900; Credit Fair Value Adjustment - Available-for-Sale (LT) $10,900.
Answer: E
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