Question

tb problem qu. 15 - 219 (algo) adjusting available - for - sale debt securities to fair value
the company held the following short - term investments in its portfolio of available - for - sale debt securities at december 31. it had no short - term investments in its prior accounting periods.
available - for - sale
securities
cbs corporation bonds
nbc corporation notes
abc company bonds
cost
$ 72,000
53,000
68,000
fair value
$ 70,560
47,170
65,280
enter answers in the tabs below.
fair value
adjustment
general
journal
compute the unrealized gain or loss.
fair value adjustment computation—available for sale portfolio
cbs corporation bonds
nbc corporation notes
abc company bonds
total
cost
$ 72,000
53,000
68,000
$ 193,000
fair value
$ 70,560
47,170
65,280
$ 183,010
unrealized
amount

Explanation:

Step1: Calculate unrealized amount for each security

For CBS Corporation bonds: Unrealized amount = Fair Value - Cost = \(70560 - 72000=- 1440\) (loss)
For NBC Corporation notes: Unrealized amount = \(47170 - 53000=-5830\) (loss)
For ABC Company bonds: Unrealized amount = \(65280 - 68000=-2720\) (loss)

Step2: Sum up the unrealized amounts

Total Unrealized amount=\((-1440)+(-5830)+(-2720)=-9990\)

Answer:

The total unrealized loss is \(\$9990\)