A Debt Service Fund held marketable securities that cost $1,000,000 when purchased during 2011. The securities had fair values of $900,000 on December 31, 2019, and $960,000 on December 31, 2020. The average fair value during the year was $950,000. Assuming the government made no journal entries for these securities during 2020, what journal entry should be made in the Debt Service Fund to report the securities in its balance sheet on December 31, 2020?
a.
$\begin{array}{lll}
\text { Investments } & 60,000 & \
\quad \text { Revenues-net increase in fair value of investments } &&60,000\
\end{array}$

b.
$\begin{array}{lll}
\text { Investments }&40,000\
\quad\text { Revenues-net decrease in fair value of investments }&&40,000
\end{array}$

c.
$\begin{array}{lll}
\text { Investments } & 50,000\
\text { Revenues-net increase in fair value of investments }& & 50,000
\end{array}$

d. No entry is necessary because the securities were not sold and no gain or loss was realized.

Question

A Debt Service Fund held marketable securities that cost $1,000,000 when purchased during 2011. The securities had fair values of $900,000 on December 31, 2019, and $960,000 on December 31, 2020. The average fair value during the year was $950,000. Assuming the government made no journal entries for these securities during 2020, what journal entry should be made in the Debt Service Fund to report the securities in its balance sheet on December 31, 2020?
 a. 
$\begin{array}{lll}
\text { Investments } & 60,000 & \
\quad \text { Revenues-net increase in fair value of investments } &&60,000\
\end{array}$

b.
$\begin{array}{lll}
\text { Investments }&40,000\
\quad\text { Revenues-net decrease in fair value of investments }&&40,000
\end{array}$

c.
$\begin{array}{lll}
\text { Investments } & 50,000\
\text { Revenues-net increase in fair value of investments }& & 50,000
\end{array}$

d. No entry is necessary because the securities were not sold and no gain or loss was realized.

Quizplus · Accepted Answer

The Answer of A Debt Service Fund held marketable securities that cost $1,000,000 when purchased during 2011. The securities had fair values of $900,000 on December 31, 2019, and $960,000 on December 31, 2020. The average fair value during the year was $950,000. Assuming the government made no journal entries for these securities during 2020, what journal entry should be made in the Debt Service Fund to report the securities in its balance sheet on December 31, 2020?
 a. 
$\begin{array}{lll}
\text { Investments } & 60,000 & \
\quad \text { Revenues-net increase in fair value of investments } &&60,000\
\end{array}$

b.
$\begin{array}{lll}
\text { Investments }&40,000\
\quad\text { Revenues-net decrease in fair value of investments }&&40,000
\end{array}$

c.
$\begin{array}{lll}
\text { Investments } & 50,000\
\text { Revenues-net increase in fair value of investments }& & 50,000
\end{array}$

d. No entry is necessary because the securities were not sold and no gain or loss was realized.