Question

Exercise 17-19 Presented below is information related to the purchases of common stock by Blossom Company during 2020. Investment in Arroyo Company stock Investment in Lee Corporation stock Investment in Woods Inc. stock Total Cost (at purchase date) $102,000 253,000 192,000 $547,000 Fair Value (at December 31) $80,000 301,000 201,000 $582,000 (Assume a zero balance for any Fair Value Adjustment account.) (a) (b) What entry would Blossom make at December 31, 2020, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option? What entry would Blossom make at December 31, 2020, to record the investments in the Lee and Woods corporations, assuming that Blossom did not select the fair value option for these investments? (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 o for the amounts.) No. Account Titles and Explanation Debit Credit

Answer 1

solutions Journal entries Date particulars Debit($) credit($). 31-Dec-20 unrealized gainſ (hoss) Alc (102000 - SO ODD) 22000 To investment equity Alc 22000 to record the investment made in arroyo com stock at faus value option) b) 31-Dec-201 Adjustment of fair value All 57000 (301000-253000) +201000-192.000) To unrealized gain |&oss) Alc (To record gainon ke investment) 57000