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On January 1, Valuation Allowance for Trading Investments had a zero balance


On January 1, Valuation Allowance for Trading Investments had a zero balance. On December 31, the cost of the trading securities portfolio was $71,000, and the value was $72,900. 

Prepare the December 31 adjusting journal entry to record the unrealized gain or loss on trading investments.

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Dec. 31 Valuation Allowance for Trading Investments 1,900 =72,900-71,000
       Unrealized Gain on Trading Investments 1,900
(To record unrealized gain on investment)
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