Recording Entries for Equity Investment: FV-NIAdjust FVA at Year-EndAt December 31, 2019, the portfolio of investments in equity securities measured at FV-NI held by Athletes Inc. is as follows.Investment SecurityCostFair ValueUnrealizedHoldingGain (Loss)Badger Common Stock (1,000 shares)$20,000$19,750$(250)Spartan Common Stock (1,600 shares)25,00025,500500Wildcat Common Stock (500 shares)12,50011,750(750)Total$57,500$57,000$(500)On June 1, 2020, Athletes Inc. sold 200 shares of Spartan stock for $33 per share and 50 shares of Wildcat stock for $55 per share. Athletes Inc. purchased 200 shares of Gopher common stock for $35 per share on August 1, 2020. The fair value of the remaining stock held on December 31, 2020, is as follows: Badger common stock, $21,000; Spartan common stock, $18,000; Wildcat common stock, $10,400; and Gopher common stock, $7,200.a. Prepare the entry for the sale of Spartan and Wildcat common stock on June 1, 2020.b. Record the purchase of Gopher common stock on August 1, 2020.c. Prepare any adjusting entry needed on December 31, 2020. Note: List multiple debits or credits (when applicable) in alphabetical order. DateAccount NameDr.Cr.a.June 1, 2020? ? ? b.Aug 1, 2020? ? c.Dec. 31, 2020? ? **Recording Entries for Equity Investment: FV-NI****Adjust FVA at Year-End***At December 31, 2019, the portfolio of investments in equity securities measured at FV-NI held by Athletes Inc. is as follows.*| Investment Security | Cost | Fair Value | Unrealized Holding Gain (Loss) ||------------------------------|---------|------------|--------------------------------|| Badger Common Stock (1,000 shares) | $20,000 | $19,750 | $(250) || Spartan Common Stock (1,600 shares) | $25,000 | $25,500 | $500 || Wildcat Common Stock (500 shares) | $12,500 | $11,750 | $(750) || **Total** | **$57,500** | **$57,000** | **$(500)** |*On June 1, 2020, Athletes Inc. sold 200 shares of Spartan stock for $33 per share and 50 shares of Wildcat stock for $55 per share. Athletes Inc. purchased 200 shares of Gopher common stock for $35 per share on August 1, 2020. The fair value of the remaining stock held on December 31, 2020, is as follows: Badger common stock, $21,000; Spartan common stock, $18,000; Wildcat common stock, $10,400; and Gopher common stock, $7,200.*a. *Prepare the entry for the sale of Spartan and Wildcat common stock on June 1, 2020.*b. *Record the purchase of Gopher common stock on August 1, 2020.*c. *Prepare any adjusting entry needed on December 31, 2020.***Note:** List multiple debits or credits (when applicable) in alphabetical order.| Date | Account Name | Dr. | Cr. ||-----------------|-----------------------------------|------|------|| a. June 1, 2020 | | | || b. Aug. 1, 2020 | | | || c. Dec. 31, 2020| | | |

Step 1 Journal is the part of the book keeping.

Recording Entries for Equity Investment: FV-NI Adjust FVA at Year-End At December 31, 2019, the portfolio of investments in equity securities measured at FV-NI held by Athletes Inc. is as follows. Investment Security Cost Fair Value Unrealized Holding Gain (Loss) Badger Common Stock (1,000 shares) $20,000 $19,750 $(250) Spartan Common Stock (1,600 shares) 25,000 25,500 500 Wildcat Common Stock (500 shares) 12,500 11,750 (750) Total $57,500 $57,000 $(500) On June 1, 2020, Athletes Inc. sold 200 shares of Spartan stock for $33 per share and 50 shares of Wildcat stock for $55 per share. Athletes Inc. purchased 200 shares of Gopher common stock for $35 per share on August 1, 2020. The fair value of the remaining stock held on December 31, 2020, is as follows: Badger common stock, $21,000; Spartan common stock, $18,000; Wildcat common stock, $10,400; and Gopher common stock, $7,200. a. Prepare the entry for the sale of Spartan and Wildcat common stock on June 1, 2020. b. Record the purchase of Gopher common stock on August 1, 2020. c. Prepare any adjusting entry needed on December 31, 2020. Note: List multiple debits or credits (when applicable) in alphabetical order. Date Account Name Dr. Cr. a. June 1, 2020 ? ? ? b. Aug 1, 2020 ? ? c. Dec. 31, 2020 ? ?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Recording Entries for Equity Investment: FV-NI

Adjust FVA at Year-End

At December 31, 2019, the portfolio of investments in equity securities measured at FV-NI held by Athletes Inc. is as follows.

Investment Security	Cost	Fair Value	Unrealized Holding Gain (Loss)
Badger Common Stock (1,000 shares)	$20,000	$19,750	$(250)
Spartan Common Stock (1,600 shares)	25,000	25,500	500
Wildcat Common Stock (500 shares)	12,500	11,750	(750)
Total	$57,500	$57,000	$(500)

On June 1, 2020, Athletes Inc. sold 200 shares of Spartan stock for $33 per share and 50 shares of Wildcat stock for $55 per share. Athletes Inc. purchased 200 shares of Gopher common stock for $35 per share on August 1, 2020. The fair value of the remaining stock held on December 31, 2020, is as follows: Badger common stock, $21,000; Spartan common stock, $18,000; Wildcat common stock, $10,400; and Gopher common stock, $7,200.

a. Prepare the entry for the sale of Spartan and Wildcat common stock on June 1, 2020.
b. Record the purchase of Gopher common stock on August 1, 2020.
c. Prepare any adjusting entry needed on December 31, 2020.

Note: List multiple debits or credits (when applicable) in alphabetical order.

	Date	Account Name
a.	June 1, 2020	?
		?
		?
b.	Aug 1, 2020	?
		?
c.	Dec. 31, 2020	?
		?

**Recording Entries for Equity Investment: FV-NI**

**Adjust FVA at Year-End**

*At December 31, 2019, the portfolio of investments in equity securities measured at FV-NI held by Athletes Inc. is as follows.*

| Investment Security | Cost | Fair Value | Unrealized Holding Gain (Loss) |
|------------------------------|---------|------------|--------------------------------|
| Badger Common Stock (1,000 shares) | $20,000 | $19,750 | $(250) |
| Spartan Common Stock (1,600 shares) | $25,000 | $25,500 | $500 |
| Wildcat Common Stock (500 shares) | $12,500 | $11,750 | $(750) |
| **Total** | **$57,500** | **$57,000** | **$(500)** |

*On June 1, 2020, Athletes Inc. sold 200 shares of Spartan stock for $33 per share and 50 shares of Wildcat stock for $55 per share. Athletes Inc. purchased 200 shares of Gopher common stock for $35 per share on August 1, 2020. The fair value of the remaining stock held on December 31, 2020, is as follows: Badger common stock, $21,000; Spartan common stock, $18,000; Wildcat common stock, $10,400; and Gopher common stock, $7,200.*

a. *Prepare the entry for the sale of Spartan and Wildcat common stock on June 1, 2020.*

b. *Record the purchase of Gopher common stock on August 1, 2020.*

c. *Prepare any adjusting entry needed on December 31, 2020.*

**Note:** List multiple debits or credits (when applicable) in alphabetical order.

| Date | Account Name | Dr. | Cr. |
|-----------------|-----------------------------------|------|------|
| a. June 1, 2020 | | | |
| b. Aug. 1, 2020 | | | |
| c. Dec. 31, 2020| | | |

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