The investments of Charger Inc. include a single investment: 18,440 shares of Raiders Inc. common stock purchased on February 24, Year 1, for $37 per share including brokerage commission. These shares were classified as trading securities. As of the December 31, Year 1, balance sheet date, the share price had increased to $45 per share.Required:A.Journalize the entries to acquire the investment on February 24, and record the adjustment to fair value on December 31, Year 1. Refer to the Chart of Accounts for exact wording of account titles.

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Asked Nov 26, 2019
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The investments of Charger Inc. include a single investment: 18,440 shares of Raiders Inc. common stock purchased on February 24, Year 1, for $37 per share including brokerage commission. These shares were classified as trading securities. As of the December 31, Year 1, balance sheet date, the share price had increased to $45 per share.
Required:
A. Journalize the entries to acquire the investment on February 24, and record the adjustment to fair value on December 31, Year 1. Refer to the Chart of Accounts for exact wording of account titles.
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Expert Answer

Step 1

Meaning of shares:

Shares are also known as equities, shares are like tiny fractions of a company. Shares are units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profit and an equal obligation for the company’s debt and losses.

Step 2

Following are the jou...

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Journal Entries Particulars Date Debit Credit Feb. 24 Investment in share of R Inc. (18,440 x $37) $682,280 To Cash Account $682,280 (Being Investment made in shares) Trading Securities Account Debit (18,440 x (45-37)) $147,520 Dec. 31 To Unrealized gain on trading securities Account (Being gain adjustment) $147,520

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