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Journalize the entries to acquire the investment on August

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Reference no: EM132683715

Problem - Fair value journal entries, available-for-sale investments

The investments of Macon, Inc., include a single investment: 8,000 shares of Pacific Wave, Inc. common stock purchased on August 10, 2012, for $8 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, 2012, balance sheet date, the share price declined to $6 per share.

Required -

a. Journalize the entries to acquire the investment on August 10, and record the adjustment to fair value on December 31, 2012.

b. How is the unrealized gain or loss for available-for-sale investments disclosed on the financial statements?

Reference no: EM132683715

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