Asked by Haley Murphy on Jun 11, 2024
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At January 1 2017 Grand Corporation held one available-for-sale security: 1500 shares of Nettle common stock purchased for $40 per share. At December 31 2017 the fair value per share for Nettle was $42. Prepare the adjusting entry to report the portfolio at fair value at December 31 2017.
Available-For-Sale Security
A financial investment not classified as held-for-trading or held-to-maturity, which can be sold in the short term for cash.
Fair Value
An estimate of a security's worth on an open market, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller.
Adjusting Entry
These are journal entries made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.
- Prepare and adjust journal entries to report investments at fair value according to GAAP.
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Learning Objectives
- Prepare and adjust journal entries to report investments at fair value according to GAAP.
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