d. Prepare the entries required in Year 2 to record dividend revenue, the sale of stock, and the fair value adjustment. Assume that the Fair Value Adjustment account needs to be adjusted for the investment portfolio on December 31, Year 2. Date Mar. 2, Year 2 Cash Account Name Dividend Revenue To record dividends received. Oct. 1, Year 2 Cash Interest Receivable To record sale of investment. Dec. 31, Year 2 Unrealized Gain or Loss-Income Fair Value Adjustment--Equity Securities To adjust the FVA account. Dr. Cr. 520 0 0 520 2,000 0 ✓ 0 80 * 0 80 x 2,400 0 ✓ 0 2,400 ✓ e. Indicate items and amounts that should be reported on the Year 2 income statement and year-end balance sheet. Note: Use a negative sign to indicate a loss. Income Statement Other Revenues(Expenses) Dividend revenue Year 2 520 Net gain (loss) on equity securities (2,400) x Balance Sheet, Dec. 31, Year 2 Assets
d. Prepare the entries required in Year 2 to record dividend revenue, the sale of stock, and the fair value adjustment. Assume that the Fair Value Adjustment account needs to be adjusted for the investment portfolio on December 31, Year 2. Date Mar. 2, Year 2 Cash Account Name Dividend Revenue To record dividends received. Oct. 1, Year 2 Cash Interest Receivable To record sale of investment. Dec. 31, Year 2 Unrealized Gain or Loss-Income Fair Value Adjustment--Equity Securities To adjust the FVA account. Dr. Cr. 520 0 0 520 2,000 0 ✓ 0 80 * 0 80 x 2,400 0 ✓ 0 2,400 ✓ e. Indicate items and amounts that should be reported on the Year 2 income statement and year-end balance sheet. Note: Use a negative sign to indicate a loss. Income Statement Other Revenues(Expenses) Dividend revenue Year 2 520 Net gain (loss) on equity securities (2,400) x Balance Sheet, Dec. 31, Year 2 Assets
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter12: Corporations: Organization, Stock Transactions, And Dividends
Section: Chapter Questions
Problem 4COP: Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31,...
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