A Short-Term Investment Acquired for $11,500 Has a Year-End Market

question 91

Multiple Choice

A short-term investment acquired for $11,500 has a year-end market value of $10,000.The adjusting entry involves a:

• A) debit to Unrealized Loss on Fair-Value Adjustment for $1,500
• B) debit to Short-Term Investments for $1,500
• C) credit to Unrealized Gain on Fair-Value Adjustment for $1,500
• D) No adjusting entry is required.

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