S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2016, S&L purchased Coca-Cola common shares for $875,000 and sold the shares on January 3, 2017, for $880,000. At December 31, the shares had a fair value of $873,000. When it purchased the Coca-Cola shares, S&L Financial decided to elect the fair value option for this investment. Prepare journal entries for the following events: 1) Purchase of investment 2) Record year-end adjustment for fair value 3) Sale of investment
S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2016, S&L purchased Coca-Cola common shares for $875,000 and sold the shares on January 3, 2017, for $880,000. At December 31, the shares had a fair value of $873,000. When it purchased the Coca-Cola shares, S&L Financial decided to elect the fair value option for this investment. Prepare journal entries for the following events: 1) Purchase of investment 2) Record year-end adjustment for fair value 3) Sale of investment
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2016, S&L purchased Coca-Cola common shares for $875,000 and sold the shares on January 3, 2017, for $880,000. At December 31, the shares had a fair value of $873,000. When it purchased the Coca-Cola shares, S&L Financial decided to elect the fair value option for this investment.
Prepare
1) Purchase of investment
2) Record year-end adjustment for fair value
3) Sale of investment
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