Accounting (Text Only)
26th Edition
ISBN: 9781285743615
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 15, Problem 15.4APE
To determine
Trading securities: These are short-term investments in debt and equity securities with an intention of trading and earning profits due to changes in market prices.
Debit and credit rules:
- Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in
stockholders’ equity accounts.
- Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.
To journalize: The year-end valuation of trading securities transaction
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Valuing Trading Securities at Fair Value
On January 1, Valuation Allowance for Trading Investments had a zero balance. On December 31, the cost of the trading securities portfolio was $54,800, and the fair value was $55,800.
Prepare the December 31 adjusting journal entry to record the unrealized gain or loss on trading investments.
Instructions
On January 1, Valuation Allowance for Trading Investments had a zero balance. On December
31, the cost of the trading securities portfolio was $380,400, and the fair value was $346,500.
Prepare the December 31 adjusting journal entry to record the unrealized gain or loss on trading
investments. Refer to the Chart of Accounts for exact wording of account titles.
On January 1, Valuation Allowance for Trading Investments had a zero balance. On December 31, the cost of the trading securities portfolio was $379,600, and the fair value was $358,900.
Prepare the December 31 adjusting journal entry to record the unrealized gain or loss on trading investments. Refer to the Chart of Accounts for exact wording of account titles.
Chapter 15 Solutions
Accounting (Text Only)
Ch. 15 - Why might a business invest cash in temporary...Ch. 15 - What causes a gain or loss on the sale of a bond...Ch. 15 - When is the equity method the appropriate...Ch. 15 - How does the accounting for a dividend received...Ch. 15 - Prob. 5DQCh. 15 - What is the major difference in the accounting for...Ch. 15 - Prob. 7DQCh. 15 - How would a debit balance in Unrealized Gain...Ch. 15 - What are the factors contributing to the trend...Ch. 15 - Prob. 10DQ
Ch. 15 - Prob. 15.1APECh. 15 - Bond investment transactions Journalize the...Ch. 15 - Prob. 15.2APECh. 15 - Stock investment transactions On September 12,...Ch. 15 - Prob. 15.3APECh. 15 - Prob. 15.3BPECh. 15 - Prob. 15.4APECh. 15 - Prob. 15.4BPECh. 15 - Prob. 15.5APECh. 15 - Prob. 15.5BPECh. 15 - Prob. 15.6APECh. 15 - Prob. 15.6BPECh. 15 - Prob. 15.1EXCh. 15 - Prob. 15.2EXCh. 15 - Prob. 15.3EXCh. 15 - Prob. 15.4EXCh. 15 - Prob. 15.5EXCh. 15 - Entries for investment in stock, receipt of...Ch. 15 - Prob. 15.7EXCh. 15 - Prob. 15.8EXCh. 15 - Entries for stock investments, dividends, and sale...Ch. 15 - Prob. 15.10EXCh. 15 - Prob. 15.11EXCh. 15 - Prob. 15.12EXCh. 15 - Prob. 15.13EXCh. 15 - Prob. 15.14EXCh. 15 - Prob. 15.15EXCh. 15 - Prob. 15.16EXCh. 15 - Fair value journal entries, trading investments...Ch. 15 - Prob. 15.18EXCh. 15 - Prob. 15.19EXCh. 15 - Prob. 15.20EXCh. 15 - Prob. 15.21EXCh. 15 - Prob. 15.22EXCh. 15 - Prob. 15.23EXCh. 15 - Prob. 15.24EXCh. 15 - Prob. 15.25EXCh. 15 - Prob. 15.26EXCh. 15 - Prob. 15.27EXCh. 15 - Prob. 15.28EXCh. 15 - Prob. 15.29EXCh. 15 - Prob. 15.1APRCh. 15 - Prob. 15.2APRCh. 15 - Stock Investment transaction, equity method and...Ch. 15 - Prob. 15.4APRCh. 15 - Prob. 15.1BPRCh. 15 - Prob. 15.2BPRCh. 15 - Stock investment transactions, equity method and...Ch. 15 - Prob. 15.4BPRCh. 15 - Selected transactions completed by Equinox...Ch. 15 - Benefits of fair value On July 16, 1998, Wyatt...Ch. 15 - International fair value accounting International...Ch. 15 - Prob. 15.3CPCh. 15 - Warren Buffett and "look-through" earnings...Ch. 15 - Prob. 15.5CP
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- On January 1, Valuation Allowance for Trading The balance sheet caption used to report temporary or long-term investments in stocks or bonds held as either trading, available-for-sale, held-to-maturity or equity method securities. Investments had a zero balance. On December 31, the cost of the trading securities portfolio was $66,800, and the fair value was $68,000. Prepare the December 31 adjusting journal entry to record the Changes in the fair value of equity or debt securities for a period.unrealized gain or loss on trading investments. Dec. 31arrow_forwardValuing Trading Securities at Fair ValueOn January 1, Valuation Allowance for Trading Investments had a zero balance. On December 31, the cost of the trading securities portfolio was $47,000, and the fair value was $48,300.Prepare the December 31 adjusting journal entry to record the unrealized gain or loss on trading investments.Dec. 31arrow_forwardOn January 1, the valuation allowance for trading investments account has a zero balance. On December 31, the cost of trading securities portfolio was $64,200, and the fair value was $67,000. Prepare the December 31 adjusting journal entry to record the unrealized gain or loss on trading investments.arrow_forward
- aluing Trading Securities at Fair Value On January 1, Valuation Allowance for Trading Investments had a zero balance. On December 31, the cost of the trading securities portfolio was $59,000, and the fair value was $60,400. Prepare the December 31 adjusting journal entry to record the unrealized gain or loss on trading investments. Dec. 31arrow_forwardTrading Securities at Fair Value On January 1, 20Y9, Valuation Allowance for Trading Investments had a zero balance. On December 31, the cost of the trading securities portfolio was $62,600, and the fair value was $63,500. Journalize the December 31, 20Y9, adjusting entry to record the unrealized gain or loss on trading investments. If an amount box does not require an entry, leave it blank. Dec. 31arrow_forwardValuing Available-for-Sale Securities at Fair Value On January 1, Valuation Allowance for Available-for-Sale Investments had a zero balance. On December 31, the cost of the available-for-sale securities was $216,000, and the fair value was $221,900. Prepare the adjusting entry to record the unrealized gain or loss on available-for-sale investments on December 31.arrow_forward
- Valuing Available-for-Sale Securities at Fair Value On January 1, Valuation Allowance for Available-for-Sale Investments had a zero balance. On December 31, the cost of the available-for-sale securities was $184,500, and the fair value was $189,540. Prepare the adjusting entry to record the unrealized gain or loss on available-for-sale investments on December 31. Dec. 31arrow_forwardaluing Available-for-Sale Securities at Fair ValueOn January 1, Valuation Allowance for Available-for-Sale Investments had a zero balance. On December 31, the cost of the available-for-sale securities was $198,000, and the fair value was $203,410.Prepare the adjusting entry to record the unrealized gain or loss on available-for-sale investments on December 31.Dec. 31arrow_forwardWindsor Company has the following data at December 31, 2020 for its debt securities: Securities Cost Fair Value Available-for-sale $44,200 $50,700 Trading 59,800 54,600 Journalize the December 31 adjusting entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry.) Date Account Titles and Explanation Dec. 31 Debit Credit Dec. 31 (To record fair value adjustment for available-for-sale investment) (To record fair value adjustment for trading investment)arrow_forward
- At December 31, 2022, the trading debt securities for Sheridan, Inc. are as follows. Security A (a) B C Cost $17,800 12,000 Dec. 31 22,900 $52,700 Fair Value $16,300 13,600 19,400 $49,300 Prepare the adjusting entry at December 31, 2022, to report the securities at fair value. (List all debit entries before credit er Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No- for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Creditarrow_forwardTrading Investments purchased for $10 were compared with the fair value of $8 at the end of the year. The journal entry to adjust the investments would include a: Group of answer choices credit to Valuation Allowance for Trading Investments $2. debit to Valuation Allowance for Trading Investments $2. credit to Unrealized Gain on Trading Investments $2. debit to Unrealized Gain on Trading Investments $2.arrow_forwardTerra Cotta Company has the following data at December 31, 2020 for its securities: Security Cost Fair Value Available-for-sale $34,000 $39,000 Trading 46,000 42,000 Journalize the December 31 adjusting entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 (To record available-for-sale securities) Dec. 31 (To record trading securities)arrow_forward
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