(Answered) Question - for several years fister links products has held

Accounting

Question - For several years Fister Links Products has held Microsoft bonds, considered by the company to be securities available-for-sale.

The bonds were acquired at a cost of $500,000 at the beginning of 2018.

At the end of 2018, their fair value was $610,000 and their amortized cost was $510,000.

At the end of 2019, their fair value was $600,000 and their amortized cost was $520,000.

a. At what amount will the investment be reported in the December 31, 2019, balance sheet?

b. What is the adjusting entry for 2018 (ignore interest).

c. What is the adjusting entry on 2019 (ignore interest).

d. What is wrong with the amortized cost in this problem?

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