On January 1, 2019, Seminole Inc. purchased 300 shares of Cornett Company common stock at $40...
On January 1, 2019, Seminole Inc. purchased 300 shares of Cornett Company common stock at $40 per share. Assume that on December 31, 2019, the investment in Cornett Company stock has a market value of $10,500.
Required:
| Prepare the year-end journal entry to record the unrealized gain or loss. 2 journal entries |
Homework Answers
Solution: This investment should be classified & accounted as AFS(available for sale) since, holding period is unspecified.
Journal entry:
|
Date |
Accounts Title | Debit | Credit |
|---|---|---|---|
| Dec. 31, 2019 | Unrealized holding loss on investments | $1,500 | |
| Fair value adjustment in Seminole Inc. | $1,500 |
Workings: Unrealized holding loss = $300*40 - 10,500 = $1,500
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On January 1, 2019, Seminole Inc. purchased 300 shares of
Cornett Company common stock at $40...
On January 1, 2019, Seminole Inc. purchased 300 shares of Cornett Company common stock at $40...
On January 1, 2019, Seminole Inc. purchased 300 shares of Cornett Company common stock at $40 per share. The investment in Cornett Company stock has a market value of $10,500 on December 31, 2019. Seminole recorded the necessary year-end journal entry to record the unrealized gain or loss. Assume that on February 1, 2020, Seminole sold its investment in Cornett stock for $10,000. Required: Prepare the journal entries of Seminole to record the sale. 3 journal entries
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