Question

On December 21, 2017, Skysong Company provided you with the following information regarding its equity investments.

December 31, 2017
Investments (Trading)		Cost		Fair Value		Unrealized Gain (Loss)
Clemson Corp. stock		$19,500		$18,500		$(1,000	)
Colorado Co. stock		9,100		8,000		(1,100	)
Buffaloes Co. stock		19,500		20,140		640
Total of portfolio		$48,100		$46,640		(1,460	)
Previous fair value adjustment balance						0
Fair value adjustment—Cr.						$(1,460	)

During 2018, Colorado Company stock was sold for $8,480. The fair value of the stock on December 31, 2018, was Clemson Corp. stock—$18,600; Buffaloes Co. stock—$20,040. None of the equity investments result in significant influence.

(a)		Prepare the adjusting journal entry needed on December 31, 2017.
(b)		Prepare the journal entry to record the sale of the Colorado Co. stock during 2018.
(c)		Prepare the adjusting journal entry needed on December 31, 2018.

(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.	Account Titles and Explanation	Debit	Credit
(a)
(b)
(c)

Answer 1

$ 1460 $ 9400. No. Accand Tilles and faplanation Debil | Creded (a) Unrealized Holding Gainom $1460 loss- Incond Fair Valve adjustment an to adjust fair value for 2017) | I Cash f8480 how on sale of Investment. If 620 Jetcombay the same time to edina) (c) Fair Value Adjustment s 1100 Unrealized Holding Gain Oir loss - frcome. 6 1100 Ilto adjust to fare value for 2018. Explanations : Investments Cost Pain value Unrealized Clemson Comp.stock $19500 $18600 $(900) Buffaloes co-stock $ 19500 $20,040 $ 540 $39000 P 38640 $ (360) Previous fair value $ 1460 Adjustment Cerceded) $ 1900 FairValue Adjustment * (Debid) . Gain Class) $ 91000