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9. On August ​20, 2018​, Macak​, Co. decides to invest excess cash of $ 3 comma 000 by purchasing Buffalo​, Inc. bonds. At​ year-end, December ​31, 2018​, the market price of the bonds was $ 2 comma 400. The investment is categorized as​ available-for-sale debt. Journalize the adjusting entry needed at December ​31, 2018.

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Answer: Please refer to explanation.

Explanation:

Since it is an Available for Sale debt, we journalize it as follows

2018    

Dec. 31

DR Unrealized holding loss on AFS  600  

CR                 .Fair value adjustment - AFSI  600

(To record available-for-sale investments at fair value)  

Calculation,

= Cost Price - Market Price

=($3000 - $2400)

= $600

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  • The adjusting entry is as follows:

On Dec. 31 2018    

Unrealized holding loss on AFSI ($3000 - $2400) 600  

               Fair value adjustment - AFSI  600

(To record available-for-sale investments at fair value)

In this, the adjusting entry should be recorded.

Learn more: brainly.com/question/6201432

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