Question

(#9) Trading Securities

On July 1, 2018, Wolfpack Corporation purchased securities which it intends to buy and sell frequently. These securities consisted of (a) Todd Corporation 10%, 5-year bonds with a face value of $20,000 which were purchased for $18,500 and (b) 400 shares of Cornett Company common stock which were purchased at $40 per share. Assume that on December 31, 2018, the investment in Todd Corporation bonds has a market value of $22,000, and the investment in Cornett Company stock has a market value of $15,000.

Required:

Prepare the year-end journal entry to record the unrealized gain or loss.

CHART OF ACCOUNTS
Wolfpack Corporation
General Ledger
ASSETS 111 Cash 113 Investment in Trading Securities 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Equipment 189 Accumulated Depreciation 191 Investment in Held-to-Maturity Debt Securities LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings	REVENUE 411 Sales Revenue 431 Interest Income EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense 912 Unrealized Holding Gain/Loss

Prepare the journal entry to record the unrealized gain or loss on December 31, 2018.

GENERAL JOURNAL !(Just need amounts)!

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1	Dec. 31	Investment in Trading Securities
2		Unrealized Holding Gain/Loss

Answer 1

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