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What is the journal entry to record an unrealized gain on an available-for-sale (AFS) security?

When a company has an investment that is classified as available-for-sale, any unrealized gains or losses (i.e. temporary change in fair value) are recorded to other comprehensive income (OCI), which is part of stockholders equity on the balance sheet. There is no impact to the income statement.

When the company has an unrealized gain, the debit would be to the investment account in the asset section and the credit would be to other comprehensive income (increased equity).


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