Homework Answers
Ans:Following are the journal entries for the different cases below:
| S no | Particulars | Debit | Credit |
| A). | Equity investments A/c. | $130,000 | |
| To cash | $130,000 | ||
| (being record purcahse of investment as trading securities) | |||
| B). | Cash A/c. (5000*5.25) | $26,250 | |
| To dividend revenue | $26,250 | ||
| (Being revenue received) | |||
| C). | Fair Value Adjustment(trading) A/c. (5000*42.50-130000) | 82,500 | |
| To unrealized hold gain or loss-income | 82,500 | ||
| (being fair value adjustment recorded) |
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