Instructions Hurricane Inc. purchased a portfolio of available-for-sale securities in Year 1, its first year of operations. The cost and fair value of this portfolio on December 31, Year 1, was as follows: 1 2 Tornado Inc. 3 Tsunami Corp. 4 Typhoon Corp. Total 5 Name Number of Shares 770.00 1,210.00 2,140.00 Total Cost $13,552.00 30,129.00 43.870.00 $87,551.00 Total Fair Value $15,169.00 34,485.00 43,228.00 $92,882.00 On June 12, Year 2, Hurricane purchased 1,460 shares of Rogue Wave Inc. at $50 per share plus a $95 brokerage commission. Required: A Provide the journal entries to record the following (refer to the Chart of Accounts for exact wording of account titles): 1. The adjustment of the available-for-sale security portfolio to fair value on December 31, Year 1. 2. The June 12, Year 2, purchase of Rogue Wave Inc. stock. B. How are unrealized gains and losses treated differently for available-for-sale securities than for trading securities? [
Instructions Hurricane Inc. purchased a portfolio of available-for-sale securities in Year 1, its first year of operations. The cost and fair value of this portfolio on December 31, Year 1, was as follows: 1 2 Tornado Inc. 3 Tsunami Corp. 4 Typhoon Corp. Total 5 Name Number of Shares 770.00 1,210.00 2,140.00 Total Cost $13,552.00 30,129.00 43.870.00 $87,551.00 Total Fair Value $15,169.00 34,485.00 43,228.00 $92,882.00 On June 12, Year 2, Hurricane purchased 1,460 shares of Rogue Wave Inc. at $50 per share plus a $95 brokerage commission. Required: A Provide the journal entries to record the following (refer to the Chart of Accounts for exact wording of account titles): 1. The adjustment of the available-for-sale security portfolio to fair value on December 31, Year 1. 2. The June 12, Year 2, purchase of Rogue Wave Inc. stock. B. How are unrealized gains and losses treated differently for available-for-sale securities than for trading securities? [
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter15: Investments And Fair Value Accounting
Section: Chapter Questions
Problem 16E
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning