Loreal-American Corporation purchased several marketable securities during 2018. At December 31, 2018, thecompany had the investments in bonds listed below. None was held at the last reporting date, December 31, 2017,and all are considered securities available-for-sale.Cost Fair ValueUnrealized HoldingGain (Loss)Short term:Blair, Inc. $ 480,000 $ 405,000 $(75,000)ANC Corporation 450,000 480,000 30,000Totals $ 930,000 $ 885,000 $(45,000)Long term:Drake Corporation $ 480,000 $ 560,000 $ 80,000Aaron Industries 720,000 660,000 (60,000)Totals $1,200,000 $1,220,000 $ 20,000Required:1. Prepare appropriate adjusting entries at December 31, 2018.2. What amounts would be reported in the income statement at December 31, 2018, as a result of these adjustingentries?
Loreal-American Corporation purchased several marketable securities during 2018. At December 31, 2018, the
company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2017,
and all are considered securities available-for-sale.
Cost Fair Value
Unrealized Holding
Gain (Loss)
Short term:
Blair, Inc. $ 480,000 $ 405,000 $(75,000)
ANC Corporation 450,000 480,000 30,000
Totals $ 930,000 $ 885,000 $(45,000)
Long term:
Drake Corporation $ 480,000 $ 560,000 $ 80,000
Aaron Industries 720,000 660,000 (60,000)
Totals $1,200,000 $1,220,000 $ 20,000
Required:
1. Prepare appropriate
2. What amounts would be reported in the income statement at December 31, 2018, as a result of these adjusting
entries?
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