Journal entries for trading investments The investments of Charger Inc. include an investment of trading securities of Raiders Inc. purchased on February 24, 20Y7, for $551,000. The fair value of the securities on December 31, 20Y7, is $609,000. a. Journalize the entries for the February 24 purchase and the adjustment to fair value on December 31, 20Y7. If an amount box does not require an entry, leave it blank. 20Y7 Feb. 24 fill in the blank 3edf1609201706b_2 fill in the blank 3edf1609201706b_3 fill in the blank 3edf1609201706b_5 fill in the blank 3edf1609201706b_6 20Y7 Dec. 31 fill in the blank 3edf1609201706b_8 fill in the blank 3edf1609201706b_9 fill in the blank 3edf1609201706b_11 fill in the blank 3edf1609201706b_12 b. How is a unrealized gain or loss for trading investments reported on the financial statements? The unrealized gain or unrealized loss on trading investments is reported on the (or a separate item if significant). Unrealized losses would be in determining net income, while unrealized gains would be in determining net income..
The investments of Charger Inc. include an investment of trading securities of Raiders Inc. purchased on February 24, 20Y7, for $551,000. The fair value of the securities on December 31, 20Y7, is $609,000.
a. Journalize the entries for the February 24 purchase and the adjustment to fair value on December 31, 20Y7. If an amount box does not require an entry, leave it blank.
| 20Y7 Feb. 24 | fill in the blank 3edf1609201706b_2 | fill in the blank 3edf1609201706b_3 | |
| fill in the blank 3edf1609201706b_5 | fill in the blank 3edf1609201706b_6 | ||
| 20Y7 Dec. 31 | fill in the blank 3edf1609201706b_8 | fill in the blank 3edf1609201706b_9 | |
| fill in the blank 3edf1609201706b_11 | fill in the blank 3edf1609201706b_12 |
b. How is a unrealized gain or loss for trading investments reported on the financial statements?
The unrealized gain or unrealized loss on trading investments is reported on the (or a separate item if significant). Unrealized losses would be in determining net income, while unrealized gains would be in determining net income..
c. If the Raiders Inc. securities had been classified as available-for-sale securities, how would the investment be reported on the financial statements?
The unrealized gain on available-for-sale investments would be reported as . The debit balance of Valuation Allowance for Available-for-Sale Investments would be to the balance of the investments account of $551,000 to report the fair value of $609,000 on the .
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
