Multiple Choice
On September 13,2013,MTA Corp.acquired 50 shares of Vista,Inc.for $100 per share as a long-term available-for-sale security.At December 31,2013,the Vista shares had a fair value of $105 per share and MTA recorded the required adjusting entry to record the fair value of the Vista investment.At December 31,2104,the Vista shares had a fair value of $102 per share.How would the company record the adjustment to fair value?
A) Debit Fair Value Adjustment-Available-for-Sale (LT) for $250 and credit Unrealized Gain-Equity for $250.
B) Debit Fair Value Adjustment-Available-for-Sale (LT) for $100 and credit Unrealized Gain-Equity for $100.
C) Debit Unrealized Gain-Equity for $300 and credit Fair Value Adjustment-Available-for-Sale (LT) for $300.
D) Debit Unrealized Gain-Income for $150 and credit Fair Value Adjustment-Available-for-Sale (LT) for $150.
E) Debit Unrealized Gain-Equity for $150 and credit Fair Value Adjustment-Available-for-Sale (LT) for $150.
Correct Answer:
Verified
Correct Answer:
Verified
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