Question

Cost 30.000 Purcha Sold se 525.000 12/31/2019 For Vale Required: room Next lae What - A lable for Sale Securities Company

Answer 1

Question	Date	Particulars	Debit	Credit
1			Amount ($)	Amount ($)
	May-03	Investment in Securities C A/c ………………….Dr	50000
		To Bank A/c		50000
		(Being Purchase of Securities C at par value)
	Jul-01	Bank A/c ………………….Dr	1000
		To Interest on Securities A A/c		1000
		(Being interest income on Securities A recognized)
	Jul-01	Bank A/c ………………….Dr	25000
		To Investment in Securities A A/c		25000
		(Being Sale of Securities A sold)
	Jul-01	Unrealized gain/loss A/c………………….Dr	5000
		To Profit on sale of Securities A/c		5000
		(Being transfer of gain from Unrealized gain to P/L on sale of securities)
	Dec-31	Bank A/c ………………….Dr	15200
		To Interest on Securities B A/c		7600
		To Interest on Securities C A/c		7600
		(Being interest income on Securities B and C recognized)
	Dec-31	Investment in Securities C A/c ………………….Dr	2500
		To Unrealized gain/loss A/c		2500
		(Being Securities C revalued as on Balance sheet date and gain recognized)
	Dec-31	Since as on 1/1/19 the fair value of Securities B is same as that on 12/31/19, no journal entry/revaluation is required for the same

2 .

There is balance of $1500 in Unrealized Gain/Loss A/c
Securities B - revalued at 29000$ from cost of 30000$	-1000
Securities C - revalued at 52500$ from cost of 50000$	2500
	1500

3. As per the FASB standard No. 115, Debt and Equity instruments which are available-for-sale instruments need to be reported at FAIR VALUE at the Balance sheet date.
The unrealized gain/loss on Fair Valuation is to be reported as a separate component of Shareholders Equity.