[j wow]

In year 1, a company reported in other comprehensive income an unrealized holding loss on an investment in available-for-sale securities. During year 2, these securities were sold at a loss equal to the unrealized loss previously recognized. The reclassification adjustment should include which of the following?

ANSWER: The unrealized loss should be credited to the other comprehensive income account.

i do not get this answer. The unrealized loss is closed into AOCI at end of year 1 with a credit.

Year 1 : OCI-AFS – XXX
AFS- XXX
YEAR 1: close to AOCI at the end of the year
AOCI – XXX
OCI-AFS XXX

Year 2: Sold for realized loss, so you revese the transaction?
Realized loss – AFS XXX
AOCI- XXX

Thank you for you assistance .

[j wow]

i cant figure out how to delete this post but i finally got it lol..

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