Carpark Services Began Operations in 20X1 and Maintains Long-Term Investments

question 193

Multiple Choice

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:

• A)Debit Unrealized Gain - Equity $9,000; Credit Fair Value Adjustment - Available-for-Sale (L
• T)$9,000.
• B)Debit Unrealized Loss - Equity $9,000; Credit Fair Value Adjustment - Available-for-Sale (L
• T)$9,000.
• C)Debit Realized Loss - Income $9,000; Credit Fair Value Adjustment - Available-for-Sale (S
• T)$9,000.
• D)Debit Fair Value Adjustment - Available-for-Sale (L
• T)$9,000; Credit Unrealized Loss - Equity $9,000.
• E)Debit Fair Value Adjustment - Available-for-Sale (L
• T)$9,000; Credit Unrealized Gain - Equity $9,000.

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Definitions:

Interest

The fee for lending money, usually shown as a yearly percentage of the main sum.

Months

Units of time corresponding roughly to one cycle of the moon's phases, typically used to measure periods within a year.

Invest

The act of allocating money or capital to an endeavor with the expectation of generating an income or profit.

Earn Interest

To receive interest as income from an investment or savings, calculated in various ways including simple or compounded methods.