Fair value journal entries, trading investmentsThe investments of Charger Inc. include a single investment: 14,500shares of Raiders Inc. common stock purchased on February 24, Year 1,for $38 per share including brokerage commission. These shares werelassified as trading securities. As of the December 31, Year 1, balancesheet date, the share price had increased to $42 per share. a. Journalize the entries to acquire the investment on February 24 andrecord the adjustment to fair value on December 31, Year 1.b. How is the unrealized gain or loss for trading investments reported onthe financial statements?

Question

Fair value journal entries, trading investments
The investments of Charger Inc. include a single investment: 14,500
shares of Raiders Inc. common stock purchased on February 24, Year 1,
for $38 per share including brokerage commission. These shares were
lassified as trading securities. As of the December 31, Year 1, balance
sheet date, the share price had increased to $42 per share.

a. Journalize the entries to acquire the investment on February 24 and
record the adjustment to fair value on December 31, Year 1.
b. How is the unrealized gain or loss for trading investments reported on
the financial statements?

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