In its first year of operations, Largo Co. purchased bonds of MacDermott Corp. with a cost of $125,000 and a market value of $127,000. Largo also purchased bonds of Armistead with a cost of $25,000 and a market value of $24,700. These are classified as long-term available-for-sale securities. Prepare the journal entry to record the market value of the investments as of December 31.
What will be an ideal response?
| Dec 31 | Fair value Adjustment-Available-for-Sale (LT) | 1,700 | ? |
| ? | Unrealized Gain-Equity | ? | 1,700 |
| ? | ? | Fair | Holding gain | ? |
| ? | Cost | Value | (loss) | ? |
| MacDermott Co. bonds | $125,000 | $127,000 | $2,000 | ? |
| Armistead bonds | 25,000 | 24,700 | (300 | ) |
| Total | $150,000 | $151,700 | $1,700 | ? |
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