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, 20X2 is:Available-for-Sale debt SecuritiesCost Fair ValueDecember 31, 20X1$250,000 $241,000December 31, 20X2$340,000 $337,000December 31, 20X3$410,000 $415,000
A. Debit Fair Value Adjustment - Available-for-Sale (LT) $3,000; Credit Unrealized Gain - Equity, $3,000.
B. Debit Unrealized Gain - Equity $3,000; Credit Fair Value Adjustment - Available-for-Sale (LT) $3,000.
C. Debit Fair Value Adjustment - Available-for-Sale (LT) $3,000; Credit Unrealized Loss - Equity $3,000.
D. Debit Fair Value Adjustment - Available-for-Sale (LT) $6,000; Credit Unrealized Loss - Equity $6,000.
E. Debit Fair Value Adjustment - Available-for-Sale (LT) $6,000; Credit Unrealized Gain - Equity $6,000.
Answer: D
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