Question

Sunland Corporation purchased trading investment bonds for $45,000 at par. At December 31, Sunland received annual interest of $1,800, and the fair value of the bonds was $42,200.

Prepare Sunland' journal entries for (a) the purchase of the investment, (b) the interest received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (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)	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
(b)	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
(c)	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

Answer 1

No	Account	Debit	Credit
A	Investment in trading securities	45,000
	Cash		45,000
B	Cash	1,800
	Interest revenue		1,800
C	Unrealized loss - Trading securities	2800
	Investment in trading securities		2800
	(42,200-45,000)

Comment if you face any issues